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^BANKERS 

MAGAZINE 


62™ 


JULY  1908 


Year 


v v<.V  • v-  . ■V.'  V • v • V • V.i.V.i  V * • 


SPECIAL  FEATURES 

EDITORIAL  COMMENT. 

THE  REAL  ISSUE  IN  THE  FIGHT  FOR  CURRENCY  REFORM. 

CURRENCY  PLANK  IN  THE  REPUBLICAN  PLAT* 

FORM. 

THE  BANK  OF  FRANCK— By  Chaa.  A.  Cornet. 

THE  PANIC  OF  1907  AND  ITS  LESSONS  FOR  TRUST 
COMPANIES. — Views  of  Leading  Trust  Company 
Officials. — Comment  by  Clay  Herrick. 

BOND  AMORTIZATION  IN  THEORY  AND  PRACTICE. -By 

▼.  H.  KoiKlo.  Jr. 

ASSET  CURRENCY  IN  CANADA.— By  A.  C Su.m. 

THE  INTELLECTUAL  SIDE  OF  ADVERTISING.— By  F.  R MorUon. 
GETTING  NET  BUSINESS.— By  SUa.  V.  Hatch  and  A.  F.  Shaldon. 

FORECAST  OF  THE  A.  L B.  CONVENTION. 

TO*  OQXTUtrn  T AVLM  OF  CONTENT®  ABB  FA8I  XXXI II. 


J5-00  A YEAR  — 50  CENTS  A COPY. 


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PUBLISHED  MONTHLY  BY 

THE  RANKERS  PUBLISHING  GO. 

Borrow  NEW  YORK  Chicago 

UsaJ 

...  •-•  • • » rBHIHtHt'a  « .»>< 


J.  P.  MORGAN  & CO. 

23  Wall  Street,  Cor.  of  Broad 
NEW  YORK 

D REXEL  6c  CO.,  Cor.  6th  and  Chestnut  Sts.,  Philadelphia 
MORGAN,  HARJES  6c  CO.,  81  Boulevard  Haussmann,  Paris 

Domestic  and  Foreign  Bankers 


Deposits  received  subject  to  draft.  Securities  bought  and  sold  on  commis- 
sion. Interest  allowed  on  deposits.  Foreign  Exchange.  Commercial 
Credits.  Cable  Transfers.  Circular  letters  for  Travelers 
available  in  all  parts  of  the  World 

ATTORNEYS  AND  AGENTS  OF 

Messrs.  J.  S.  MORGAN  & CO. 

No.  22  Old  Broad  Street,  London 


Fisk  & Robinson 

BANKERS 


35  Cedar  St.  23  State  St.  135  Adams  St. 

NEWYORK  BOSTON  CHICAGO 

INVESTMENT  DEPARTMENT 

UNITED  STATES  BONDS  and  other  investment  securities 
bought  and  sold.  Orders  on  the  New  York  Stock  Exchange  and  in 
sound  and  marketable  unlisted  securities  executed  on  commission  for 
cash.  Information  furnished  regarding  the  status  of  corporate  securities. 

BANKING  DEPARTMENT 

DEPOSIT  ACCOUNTS  of  Corporations,  Firms  and  Individuals 
received  subject  to  sight  draft.  Interest  allowed  on  daily  balances 
and  on  money  deposited  pending  investment. 

FISCAL  AGENCY 

ACCOUNTS  for  the  payment  of  bonds,  coupons,  dividends,  etc., 
and  for  the  transfer  and  registration  of  securities  received  from 
municipal,  railroad  and  other  corporations. 


XOT ICB— Tbe  article*  In  this  Marfaiine  are  cupjrtirbted  and  mint  not  bo  xspriqffciJ 
panaiauos  of  tbo  poblUbaia.  Digitized  by 


Bankers’  Magazine 


RHODES  JOURNAL  OF  BANKING  AND  THE  BANKERS’  MAGAZINE 

CONSOLIDATED 


VOLUME  LXXVII 

JULY  TO  DECEMBER 

1908 


\ 


* 


NEW  YORK 

THE  BANKERS  PUBLISHING  CO.,  Publishers 
90  WILLIAM  STREET 


Digitized  by  Google 


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153 


7/ 


COPYRIGHT  1906 
BY  THE 

BANKERS  PUBLISHING  CO. 


Digitized  by  Tooele 


INDEX 


« 


July  to  December,  1908. 

I.  EDITORIAL  COMMENT  AND  LEADING  ARTICLES. 


A ldrich -Vreel&nd  law  as  a check  to 

currency  reform  888 

A ldrich -V reeland  law  no  check  to 

speculation  under  846 

Aldrlch-Vreeland  law,  not  expected  to 

become  a permanent  measure  888 

Aldrlch-Vreeland  law,  power  given 
Secretary  of  the  Treasury  to  desig- 
nate depositaries  4 

Allison.  Senator,  death  of  848 

American  Bankers’  Association,  disre- 
gard of  political  parties  in  conven- 
tion proceedings  of  699 

American  Bankers’  Association,  meet- 
ing of  clearing-house  section  163 

American  Bankers’  Association,  re- 
port of  committee  on  credit  infor- 
mation   9 

American  Bankers’  Association,  re- 
port of  currency  commission  of.. 698,  699 

American  Bankers’  Association,  work 

to  come  up  before  convention  842 

Amortization  of  bonds,  in  theory  and 

practice  29 

Andrew,  Professor  A.  Platt,  appointed 
an  expert  to  serve  on  monetary  com- 
mission   6 

Andrews.  Edward  L,  (the  stock  ex- 
change and  the  public)  712 

Appropriations  by  Congress  not  re- 
duced when  revenue  deficit  appears  7 

Asset  currency  In  Canada  61 

Assets  of  failed  banks,  loans  on 889 

Banker  In  literature,  the  168 

Bank  failures,  one  cause  of  removed 

In  Mexican  banks  492 

Banking  and  currency,  education  on..  701 

Banking  In  Mexico  489 

Banking  reform,  the  problem  of  700 

Banking  system,  strengthening  our...  857 

Panking  unity  494 

Bank-note  currency,  the  issue  of 

through  clearing-houses  164 

Bank  notes,  additional  issue  of.  as 
tending  to  create  new  depositors....  8 

Bank  of  England,  the  421' 

Bank  of  France,  the  18 

Bank  teller’s  suicide,  small  salary  the 

cause  of  6 

Bills  of  lading  law,  conference  of  com- 
missioners on  5 

Bonds,  the  amortization  of.  In  theory 

and  practice  28 

Branch  banks,  defense  of  Canadian 

system  of  848 

Brandeis.  Louis  D.  (Massachusetts 
savings  insurance  and  annuity  banks)  186 

Brigham,  Johnson  (the  banker  In  lit- 
erature)   168 

British  India,  the  exchange  standard 

in  707 

Business  men.  organization  of  to  se- 
cure banking  and  currency  reform . . 889 

Business,  the  revival  of  164 

Cabinet  members,  considerations  that 

enter  Into  their  selection  842 

California,  new  state  clearing-house 

organized  by  bankers  of  694 

Canada,  asset  currency  in  61 

Canadian  and  American  banking  sys- 
tems, a letter  on  848 

185054 


Canadian  and  American  banking  sys- 
tems compared  686-698 

Canadian  banking  and  commerce 240 

Central  bank,  monetary  commission 

may  favor  a 889 

Certificates  of  stock,  proposed  uniform 

regulation  of  5 

Chicago,  appointment  of  a special 
bank  examiner  by  clearing-house 

committee  of  708 

Clearing-houses,  appointment  of  spe- 
cial bank  examiners  by  708 

Clearing-houses,  co-operation  of  to 
perfect  issue  and  retirement  of  cer- 
tificates   168 

Clearing-house,  examination  of  banks 

by  694 

Clearing-houses,  deliberations  of  at 
American  Bankers’  Association  con- 
vention   842 

Cleveland.  Grover,  services  rendered  to 

the  cause  of  sound  money  9 

Collateral,  loans  on  854 

Collateral  security  for  deposits  \ 8 

Commercial  paper,  insurance  of  846 

Comptroller  of  the  Currency,  criticism 
of  for  questions  put  to  directors  of 

national  banks  702 

Comptroller  of  the  Currency,  letter  of 

to  national  bank  examiners  695 

Conant,  Charles  A.,  suggested  as  the 
man  to  be  Secretary  of  the  Treasury 
842,  848 


Conant,  Charles  A.  (the  bank  of 

France)  18 

Conant,  Charles  A.  (the  exchange 

standard  in  British  India)  707 

Conant,  Charles  A.  (the  monetary  sys- 
tem of  Japan)  848 

Corporations  as  borrowers  858 

Corporations,  uniform  law  for  the 

regulation  of  491 

Courts,  restriction  of  by  political  par- 
ties   165 

Credit  currency,  an  equitable  basis  for  499 

Credit  currency,  a plea  for 889 

Credit  information  committee  of  Amer- 
ican Bankers'  Association,  report  of  9 
Crises,  a neglected  point  in  connection 

with  846 

Currency,  asset,  in  Canada  61 

Currency,  debasement  of  165 

Currency  legislation  prevented  by 

prejudice  against  banks  701 

Currency  legislation,  proposals  of 

Republican  platform  2 

Currency  plank  in  the  Republican  plat- 
form, the  UL 


Currency  plank  of  Democratic  platform  168 

Currency  planks  of  the  two  platforms  847 

Currency  reform,  a permanent  organ- 
ization of  business  men  to  work  for  889 

Currency  reform,  conditions  that  pre- 
vent   888 

Currency  reform  movement,  a new...  887 

Currency  reforms,  a criticism  of  those 

suggested  846 

Currency  reform,  the  real  Issue  in  the 
fight  for  1 

Democratic  nominee  for  president, 

speculations  as  to  2 

Democratic  party,  currency  plank  of. . 847 

. 


IV 


THE  BANKERS  MAGAZINE. 


Democratic  party  doctrine,  its  appeal 

to  the  voter  491 

Democratic  platform,  currency  plank  of  163 
Democratic  platform,  the  overshadow- 
ing: issue  of  162 

Depositaries,  power  of  Secretary  of  the 
Treasury  to  designate,  under  Aldrich- 

Vreeland  law  4 

Deposit  insurance,  national  banks  of 
Oklahoma  cannot  avail  themselves 

of  340 

Deposits,  collateral  security  for 8 

Deposits,  guaranty  of  as  a preventa- 
tive of  panics  841 

Deposits,  guaranty  of — experience  of 

State  Bank  of  Indiana  843 

Deposits,  mutual  guaranty  of  67 

Deposits  of  government  money  refused 

under  terms  of  new  banking  law 8 

Directors,  responsibilities  of  and  ques- 
tions to  answer  695 

Dollar  mark,  the  857 

Dulles,  John  W.  (foreign  banks  of 
issue)  364 

Eckardt,  H.  M.  P.  (Canadian  banking 

and  commerce)  240 

Eckardt,  H.  M.  P.  (exchange  on  out- 

of-town  checks)  927 

Eckardt,  H.  M.  P.  (mutual  guaranty 

of  deposits)  67 

Edmonds,  John  (the  dollar  mark)  857 

Elastic  currency,  as  a check  to  specu- 
lation   841 

Esperanto,  as  a universal  language  to 

promote  peace  845 

Examination  of  banks,  a new  plan 

for  703 

Examination  of  banks  by  state  clear- 
ing-house   694 

Exchange  on  out-of-town  checks  927 

Exchange  standard  in  British  India, 

the  707 

Failed  banks,  loans  on  assets  of  339 

Foreign  banks  of  Issue  364 

Foreign  countries,  establishment  of 

American  banks  in  . .s 344 

Fowler,  Charles  N.,  a criticism  of  his 
views  in  regard  to  currency  reforms  845 
France,  no  market  for  American  se- 
curities in  166 

Genuine  and  lasting  prosperity  837 

Government  deposits  refused  under 

terms  of  new  banking  law  8 

Guaranty  of  deposits — experience  of 

State  Bank  of  Indiana  843 

Guaranty  of  deposits,  mutual  67 


Legislation,  proposal  to  issue  restrain- 
ing orders  on  courts  165 

Loans,  greater  safety  for  362 

Lyford,  F.  E.  (strengthening  our 
banking  system)  357 

Massachusetts  savings  Insurance  and 

annuity  banks  186 

Mercer,  H.  Ord  (the  bank  of  England)  421 

Merchants'  Association  of  New  York, 

attitude  on  currency  reform  337-338 

Mexico,  banking  in  489 

Mexico,  bank-notes  of  based  on  credit 

and  a coin  reserve  492 

Mexico,  loans  made  to  officers  and  di- 
rectors of  banks  of,  specially  secured  492 
Monetary  and  banking  commission,  a 

permanent  7Q5 

Monetary  commission,  a junket  of  the  344 

Monetary  commission  expert,  Professor 

A.  Piatt  Andrew  appointed  as  6 

Monetary  commission,  future  course  of  839 

Monetary  commission,  qualifications  of 

members  of  4 

Monetary  commission.  referred  to 

bank-note  system  of  Mexico  492 

Monetary  system  of  Japan,  the  348 

Murray,  Lawrence  O..  letter  of  850 

National  banks,  better  examination  of, 
as  a preventative  of  bad  banking. . . 696 

National  banks,  directors  of  850 

National  banks,  fixing  the  responsibil- 
ity for  failure  of  702 

New  York  Stock  Exchange,  suggested 

reforms  in  490 

Note-issuing  function  of  the  banks, 
complicated  truths  about  9 

Oklahoma,  national  banks  of,  cannot 
avail  themselves  of  deposit-insurance  340 

Panics,  aggravation  of  by  bad  bank- 
ing laws  846 

Panics,  causes  of  341 

Party  principles,  a discussion  of 162 

Postal  savings  banks,  proposal  to  es- 
tablish   840 

Presidential  campaign,  effect  of  on 

business  164 

Presidential  candidate,  the  161 

Presidential  candidates,  discussion  of 

their  policies  340 

Presidential  nominee  of  Democratic 

party,  speculations  as  to  2 

President,  nomination  of  Mr.  Taft  for  2 

Prosperity,  genuine  and  lasting  837 


Howard,  Earl  Dean  (the  speculators 

and  the  banks)  189 

Hulbert,  E.  D.,  address  on  banking...  346 

Industrial  bank  of  Japan,  a brief  his- 
tory of  193 

Insurance  of  deposits  and  commercial 

paper  by  Insurance  companies  846 

Interest  rate,  rise  of  as  check  to 

speculation  165 

International  American  bank,  an  685 

Japan,  comment  on  reception  of  to 

American  fleet  700 

Japan,  monetary  system  of  348 

Johannsen.  N.  (a  neglected  point  in 
connection  with  crises)  346 

Kato,  Motoshi  (a  brief  history  of  the 

industrial  bank  of  Japan)  193 

Kniffln,  W.  H.,  Jr.  (bond  amortization 

In  theory  and  practice)  29 

Korbly,  C.  A.,  Jr.,  on  guaranty  of  bank 
deposits,  with  facts  about  old  State 
Bank  of  Indiana  843 

La  tin  -America,  advantages  an  Ameri- 
can bank  would  enjoy  there  344 


Republican  party,  currency  plank  of. . 347 

Republican  party  doctrine,  its  appeal 

to  the  voter  491 

Republican  platform,  party  committed 
to  unsound  currency  legislation  by. . 2 

Republican  platform,  the  currency 

plank  in  11 

Reserves,  the  proper  kind  of  for  state 
banks  and  trust  companies  to  keep..  848 

Responsibility  of  the  banker,  the 25 

Revenue  deficits,  no  disposition  on  part 
of  Congress  to  economize  because  of  7 

Reynolds,  Arthur  (pamphlet  on  credit 

currency)  339 

Roosevelt,  Theodore,  comment  of  on 
reversal  of  Standard  Oil  fine  342 


Savings  banks,  Massachusetts,  insur- 
ance and  annuity  departments  of. . 186 

Scott,  Dr.  W.  A.,  address  on  "The 

problem  of  banking  reform"  700 

Secretary  of  the  Treasury,  arrange- 
ment of  to  retire  issue  of  Treasury 

certificates  of  indebtedness  838 

Secretary  of  the  Treasury.  Charles  A. 

Conant  suggested  for  the  842,  843 

Securities,  American,  no  market  for 

in  France  166 


Digitized  by 


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INDEX,  JULY  TO  DECEMBER,  1908 


v 


Securities,  disposition  of  by  banks. . 339 

Securities,  increased  volume  of  166 

Securities  speculation  in  fostered  un- 
der Aldrich-Vreeland  law  345 

Speculation,  fostered  by  an  inelastic 

currency  841- 

Speculators  and  the  banks,  the  189 

Spielberger,  Louis  N.  (loans  on  col- 
lateral)   354 

Standard  OH  fine,  reversal  of  342 

State  Bank  of  Indiana,  some  facts  in 

regard  to  843 

State  bank  supervisors,  report  of  com- 
mittee of  on  uniform  state  banking 

laws  847 

Steven.  A.  C.  (asset  currency  in 

Canada)  61 

Stevenson,  Charles  W.  (banking  unity)  494 
Stevenson.  Charles  W.  (corporations  as 

borrowers)  853 

Stevenson,  Charles  W.  (the  responsi- 
bility of  the  banker)  25 

Stock  Exchange  and  the  public,  the  712 

Stock  Exchange,  reforms  in  the  490 

Suicide  of  bank  teller,  small  salary 

the  cause  of  6 

Supervision  of  banks,  suggestions  for 
efficient  696 


Sweetland,  Charles  A.  (greater  safety 
for  loans)  362 

Taft,  election  as  president  — attitude 

towards  corporations  7 

Taft,  William  H.,  appointment  of  cabi- 
net members  by  842 

Taft,  William  H.,  election  of  to  presi- 
dency as  a stimulus  to  business 705 

Taft,  William  H.,  nominated  for  presi- 
dent   2 

Tickner  G.  L.  (an  equitable  basis  for 

credit  currency)  499 

Treasury  notes,  issue  of  during  panic  838 

Treasury  receipts  and  disbursements, 
imperfect  form  of  statement  of....  166 

Uniform  state  banking  laws,  report  of 

committee  on  847 

Uniform  state  laws,  national  confer- 
ence of  the  commissioners  on  5 

Walker,  B.  E.,  address  before  Ameri- 
can Bankers’  Association  on  banking 

in  the  United  States  686-693 

Warburg,  Paul  M.,  on  a modified  cen- 
tral bank  of  issue  3 

Wu  Ting-Fang,  address  of,  favoring 

a universal  language  845 


II.  BANKING  AND  FINANCIAL  LAW  AND  REPLIES  TO  QUESTIONS. 


Action  to  recover  deposit — statute  of 


limitations  882 

Bill  of  exchange — acceptance — consid- 
eration   563 

Bill  of  exchange  payable  to  order  of 
the  drawer— necessity  for  delivery..  872 

Check  payable  to  corporation  used  to 

pay  individual  debt  of  officer  386 

Check— time  for  giving  notice  of  dis- 
honor   51 

Discounting  note  incomplete  upon  its 
face — bank  not  holder  in  due  course  570 

Forged  check — fictitious  payee  875 

Forged  indorsement  — action  against 

bank  cashing  check  222 

Knowledge  of  officer  and  director — 

when  bank  not  chargeable  with  49 

National  bank — contract  of  guaranty — 

check  certified  as  guaranty  224 

National  bank— extending  period  of 
succession  — withdrawal  of  stock- 
holder   741 

National  bank — solicitor  of  business...  231 
Negotiable  Instruments  law — bill  of  -ex- 
change— acceptance— consideration  . . 870 

Note  held  as  collateral — consideration 
—substitution  for  other  collateral...  874 

Partnership  note  — Indorsement  by 

partner  51 

Payment  of  forged  checks — fictitious 

payee  744 

Powers  of  bank — note  given  to  aid  con- 
struction of  railroad  879 

Presentment  of  note  where  bank  has 

several  branches  65 

Promissory  note — consent  to  extension  566 
Promissory  note — indorser — defense  of 

usury  383 

Promissory  notes — Ailing  in  blanks — 

changing  place  of  payment  229 

Promissory  note — stipulation  that  sure- 
ties consent  to  extension  386 

Promissory  note — when  bank  holder  In 
due  course — indorsement  without  re- 
course   62 

Promissory  note — when  party  holder  In 
due  course  884 

Recovery  of  money  deposited  when 
bank  insolvent — interest  228 

Savings  bank — payment  on  forged 
order  872 


LIST  OF  CASES. 


Apsey  vs.  Whittemore  .• 741 

Arkansas  Valley  & W.  Ry.  Co.  vs. 
Farmers  and  Merchants  Bank 879 

Butler  vs.  Western  German  Bank 228 

Case  vs.  First  National  Bank  of  City 
of  Brooklyn  231 

Elgin  City  Banking  Company  vs.  Hall  52 

Fidelity  and  Deposit  Company  of 
Maryland  vs.  National  Bank  of 

Commerce  of  Dallas  224 

First  National  Bank  of  Pomeroy,  Iowa, 

vs.  Buttery  566 

First  National  Bank  of  Wilkes-Barre 
vs.  Barnum  229 

Harrowitz  vs.  Wollowitz,  et  al 383 

Hough  Avenue  Savings  and  Banking 

Co.  vs.  Anderson  872 

Hunter  vs.  Bacon  670 

Iron  Clad  Manufacturing  Co.  vs.  Sack- 

in,  et  al 55 

Jurgens  vs.  Wichmann 61 

Lanning  vs.  Johnson,  et  al 49 

Missouri  Pacific  Ry.  Co.  vs.  Continental 

National  Bank  b62 

Moss  vs.  Chamberlain 874 

National  Exchange  Bank  of  Providence 

vs.  Lubrano  51 

National  Park  Bank  vs.  Phillip  S.  Sarta  563 

National  Park  Bank  vs.  Saltta 870 

Rice  vs.  Barrington  884 

Stonffer  vs.  Curtis 872 

Tibby  Bros.  Glass  Co.  vs.  Farmers  and 

Mechanics  Bank  of  Sharpsburg 222 

Trust  Company  of  America  vs.  Hamil- 
ton Bank  of  New  York  744,  876 

Union  Stockyards  National  Bank  of 
South  Omaha  vs.  B)lan 384 

Ward  vs.  City  Trust  Co.  of  New  York, 
et  al 386 


CANADIAN  LAW. 


Banks  and  banking— check  counter- 
signed by  representative  of  bank — 
authority  of  representative — promise 
not  made  in  writing  — statute  of 
frauds— original  liability 392 


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THE  BANKERS  MAGAZINE, 


Banks  and  banking1 — discount — assign- 
ment of  warehouse  receipts  as  secur- 
ity— present  advance — Arm — subse- 

quent incorporation  of  comprny  and 
assignment  of  business  to — evidence 
of  ownership — liquidation — parties — 

estoppel  889 

Banks  and  banking — forged  check — 
negligence — responsibility  of  drawee 
— payment — mistake — indorsement — 
implied  warranty — principal  and  agent 
— action — money  had  and  received — 

change  in  position — laches  578 

Banks  and  banking — overdrawn  custo- 
mer’s account — promissory  notes — 
collateral  securities — transfer  to  third 
person — inspection  of  customer’s  ac- 
count— interest — compounding  66 

Banks  and  banking — presentment  of 
customer’s  check  to  the  wrong  clerk 
—direction  by  such  clerk  to  present 
the  check  to  another  clerk  taken  as 
refusal  to  pay — action  for  damages 
for  such  refusal — jury — evidence  suffi- 
cient to  go  to — withdrawal  of  case 


from — prlma  facie  case  676 

Banks  And  Banking— security  under 
section  88  of  bank  act — assignment 
of — payment  of  principal  debt  by 

guarantor — subrogation  232 

Bills  and  notes — material  alterations — 
forgery — partnership — mandate — as- 
sent of  parties — liability  of  indorser 
— construction  of  statute — “bills  of 

exchange  act’’  578 

Check  ambiguously  drawn — responsi- 
bility of  holder  who  delivers  it  up — 
rights  of  endorsers — mistakes  before 

presentation  of  the  check  234 

Check  — forged  indorsement  — payee — 

* ‘fictitious  or  non-existing  person” 

— belief  or  intention  of  drawers — 

bills  of  exchange  act  671 

Evidence — check  on  a bank  endorsed 

by  the  payee — proof  of  loan  760 

Evidence  — signature  to  promissory 
note — denial  on  oath — onus  of  proof 
— expert  evidence — estoppel— notice  of 
existence  of  forged  signature 748 


Prescription — short  extinctive  prescrip- 
tion of  promissory  notes — Interrup- 
• tion  — payments  by  a curator  to 

abandonment  of  property  749 

Promissory  note — subscription  for  share 
in  company — fraud — note  of  sub- 
scriber transferred  to  bank — holders 
in  due  course — hypothecation  of  se- 
curities— powers  of  company  by-law 
—resolution — indorsement  by  secre- 
tary-sufficiency— negotiation  of  note  286 

LIST  OF  CASHS. 


Allaire  vs.  King  760 

BthieT,  et  al.  vs.  Labelle,  et  &L 748 

Hebert  vs.  La  Banque  Rationale 673 

Montgomery  vs.  Ryan 66 

Nadeau  vs.  Bank  of  Toronto 2S4 

North  and  South  Bank,  Ltd.,  vs.  Mac- 
beth   571 

Rear  vs.  The  Imperial  Bank  of  Canada  676 
Re  Victor  Varnish  Co.,  Clare’s  claim  232 
Simpson  vs.  Dolan  and  the  Sovereign 

Bank  892 

Standard  Bank  of  Canada  vs.  Stephens  236 
The  Dominion  Bank  vs.  The  Union 

Bank  of  Canada 676 

The  Hochelaga  Bank  vs.  Derome,  et  al.  749 
Toronto  Cream  and  Butter  Co.,  Ltd., 
vs.  The  Crown  Bank  389 

REPLIES  TO  LAW  AND  BANKING 
QUESTIONS. 

Certificate  of  deposit  drawn  to  two 

payees  In  the  alternative  752 

Check  destroyed  after  acceptance 761 

Consignment  of  bills  receivable  as  se- 
curity— bankruptcy  885 

Demand  note — provision  for  payment 

of  interest  in  advance  396 

Enforcing  collection  under  endorse- 
ment   239 

Forged  Indorsement — effect  of  certifica- 
tion   238 

Forged  Indorsement — recovery  396 

Joint  makers — presentment  761 

Surety — waiver  of  right  to  demand 
that  suit  be  brought  against  prlncioal  761 
Waiver  of  demand  and  note — what 
sufficient — guaranty  of  payment 577 


HI.  BANKING  MISCELLANY,  REPORTS,  ETC. 


American  Bankers’  Association,  con- 
vention of  616 

American  Institute  of  Banking 

69.  263  , 426,  599,  787,  917 

Banco  Central  Mexicano  626 

Banco  de  Londres  y Mexico  632 

Banco  Hipotecarlo  de  Credito  Terri- 
torial Mexicano,  S.  A 537 

Banco  Interna  clonal  e Hipotecarlo  de 

Mexico  686 

Banco  Mexicano  de  Comercio  e Indus - 

tria,  S.  A 536 

Banco  Nacional  de  Mexico  621 

Banking  and  business  system  98 

Banking  and  financial  notes 

133,  306.  467,  657,  811,  935 

Banking  in  Brasil  423 

Banking  In  Mexico  621 

Banking  Publicity  

79.  243.  403,  579.  778.  907 

Bank  and  trust  company  stocks. 666.  809,  933 

Bank  of  England,  the  421 

Bank  of  Montreal  669 

Borrowed  notes  > 212 

Book  reviews  109,  282,  434,  639 

Burglar  traps  of  country  banks  374 

Burton,  Theodore  E,  sketch  of  with 

portrait  277 

Business  and  pleasure  279 


Castles.  John  W..  sketch  of  with 

frontispiece  portrait  925 

Clews,  Henry  (fifty  years  In  Wall 

Street)  216 

Companla  Bancaria  de  Obras  y Blenes 
Raices,  8.  A 641 


Current  Opinion: 


Aldrich  bill,  origin  of  104 

Aldrich-Vreeland  law,  Roosevelt  en- 
tirely satisfied  with  898 

Allen.  George  P.,  address  of  890 

Banker  easily  satisfied,  a 261 

Bankers,  financial  problems  of  890 

Bank  examiners  and  bank  failures. . 520 

Bank  deposits,  insurance  of  520 

Bank  guarantee  a financial  nostrum  519 

Banking  conditions  400 

Williams.  Clark,  on  banking  condi- 
tions   400 

Banking  system,  our  unprogreselve. . 762 

Boston  clearing-house,  advantages  of 

the  261 

Boyle,  Prof.  J.  E.,  on  weaknesses 

of  our  reserve  system  260 

Bryan’s  panacea  for  panics  397 

Bryan  and  the  guaranty  of  bank  de- 
posits   398 

Bryan’s  absurdity  760 

Cannon,  James  G.,  on  buying  com- 
mercial paper  761 


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INDEX,  JULY  TO  DECEMBER,  1908. 


Vll 


Capital,  the  power  of  761 

Centra]  bank,  need  of  398 

Central  bank,  power  of  520 

Clearing:  - house.  trust  companies 

should  be  made  members  of  a 899 

Comptroller  of  the  Currency  de- 
fended   898 

Credit  currency,  John  W.  Weeks  on  a 105 

Currency  object  lesson,  a 397 

De  Lons.  C.,  Interview  on  postal 

savings  banks  in  Belgium  893 

Deposit  guaranty  unnecessary  400 

Deposit  insurance  108 

Deposits,  unclaimed  260 

Financial  bugbear,  a 890 

Fowler,  Charles  N.,  on  the  bank  de- 
posit guarantee  plan  760 

Gambling  on  a large  scale  762 

Gates.  John  W.,  on  venturesome 

bankers  890 

Gilbert.  Alexander,  on  speculation . . . 762 

Government  regulation  of  the  money 

issue  262 

Guaranteeing  national  bank  deposits, 

Postmaster-General  Meyer  on  897 

Guaranty  of  bank  deposits  762 

Guaranty  of  deposits,  as  provided  for 

in  Fowler  bill  400 

Hallock.  James  C.,  praise  of  Boston 

clearing-house  261 

Herrick,  Myron  T.,  on  our  unpro- 
gressive banking  system  762 

Insurance  of  deposits  108 

International  banking  and  foreign 

trade  104 

Jonea  Breckinridge,  on  the  trust 

company  and  the  bank  762 

Legislation  proposed  and  enacted, 

criticism  of  262 

Midzuno,  Koklchl,  Consul-General  of 

Japan,  on  universal  peace  891 

Money  issue,  government  regulation 

of  the  262 

Murray,  Lawrence  O , speech  of  to 

bank  examiners  520 

National  City  Bank  of  New  York, 
letter  of  defending  the  Comptroller  898 

New  York  banka  praise  of  891 

Postal  savings  banks  in  Belgium 898 

Practical  guaranty  of  deposits 400 

Protecting  bank  depositors  762 

Real  currency  reform  400 

Reserve  system,  some  common  faults 

of  our  260 

Reynolds,  Arthur,  on  Insurance  of 

bank  deposits  262 

Roberts.  Geo.  E.,  on  need  of  a cen- 
tral bank  898 

Roosevelt,  Theodore,  letters  of  ap- 
proving Aldrich-Vreeland  law  898 

Root.  Elihu,  address  of  on  banks 

guaranteeing  deposits  619 

Safety  in  banking  519 

Single  name  paper  761 

Things  worth  observing  397 

Trust  companies  and  banks  762 

Trust  companies  should  pay  their 
checks  through  a central  office. . . . 399 

Unifying  banking  opinion  891 

Universal  peace  891 

Wade.  Festus  J.,  on  guaranty  of 

bank  deposits  762 

Warren,  Charles  E.,  address  of  be- 
fore New  York  State  Bankers’ 

Association  261 

Wayne.  Joseph,  Jr.,  condemnation  of 
governmental  guaranty  of  bank 

depbsits  890 

Weeks.  John  W.,  on  a credit  cur- 
rency   106 

Williams,  Clark,  praise  of  New  York 

banks  by  891 

Wilson,  Woodrow,  address  of  761 

Yates.  Henry  W.t  on  safe  banking. . 893 

Denver  Convention,  the  482 

Depressions,  a new  theory  as  to  the 
cause  of  288 


Federal  Banking  Co.,  Si  A 550 

Government  banks  in  China  396 

Guaranty  Trust  Company  of  New  York  925 

International  banking  753 

International  Banking  Corporation — 
Mexico  branch  558 

Latin  America: 

Argentina,  an  order  from  to  supply 

telephones  609 

August  coinage  in  Mexico  607 

Banco  de  Guanajuato  906 

Banking  system  of  Mexico,  the  ....  895 

Brazil,  agricultural  bank  In  766 

Brazilian  Ambassador  to  the  United 

States,  the  107 

Brazilian  monetary  circulation  770 

Colombia,  bank  rates  in  401 

Conan t,  Charles  A.  (the  banking 

system  of  Mexico)  896 

Foreign  capital  in  Brazil  . .i 401 

General  notes  108,  401,  614,  772,  906 

Harrlman  plans  In  Mexico  769 

Industrial  Brazil  905 

Mexican  aid  to  agriculture  108 

Mexican  banking  items  610 

Mexican  banks,  commercial  paper  in  768 
Mexican  cattle,  big  shipment  of . . . . 607 

Mexican  credits  ..  770 

Mexican  notes  611 

Mexico  and  the  United  States  . . . .... . 765 

Mexico  as  a resort  for  tourists  ......  608 

Mexico,  banking  in  607 

Mexico,  coaling  station  for  108 

Mexico,  foreign  capital  In  770 

Mexico,  national  railroad  of  771 

Mexico’s  irrigation  plan  769 

Mexico’s  national  Industries  607 

Nabuco,  Joaquim,  address  by  on  the 

approach  of  the  two  Americas 610 

Nabuco,  Joaquim,  sketch  of,  with 

portrait  107 

New  Mexican  credit  Institution; 768 

Our  trade  with  Mexico  766 

Panama  fiscal  conditions  905 

Pan-American  railroad  108 

Promoting  trade  with  Latin  America  771 
What  South  America  offers  us  764 

Letters  to  the  Editor: 

Boissevain,  G.  M.  (clearing-house 

banks)  .* 796 

Fay,  William  E.  (monetary  depres- 
sions and  panics)  794 

Monetary  depressions  and  panics — 

the  saving  factor  794 

On  regulating  the  banks  795 

Letter  that  was  not  sent,  a 906 

Mercantile  Banking  Co.,  Ltd.  552 

Mercer,  H.  Ord  (the  bank  of  England)  421 

Mexico  City  Banking  Co.,  S.  A 554 

Modern  Financial  Institutions  and 
Their  Equipment: 

Bristol  Trust  Company,  Bristol, 

Conn 288 

Columbia  Trust  Company,  New  York  285 
Commonwealth  Trust  Company,  Bos- 
ton   i 929 

Davidson,  Harold  A.,  sketch  of,  with 

portrait  638 

Fourth  National  Bank,  Nashville, 

Tennessee  448 

Homblower  A Weeks,  Boston  441 

National  Bank  of  Cuba  683 

National  Shawmut  Bank,  Boston  . . . 627 

Ohio  Savings  $ank  and  Trust  Com- 
pany, Toledo,  home  of  the  118 

Old  National  Bank,  Spokane,  Wash- 
ington   452 

Spiel  be  rger,  Louis  N.t  elected  cashier 
Union  National  Bank  of  Philadel- 
phia   122 


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THE  BANKERS  MAGAZINE, 


State  Bank  of  Hartford,  Conn.,  new 

home  of  635 

State  National  Bank,  Boston  636 

Union  Trust  Company,  Springfield, 

Mass 118 

Monetary  Commission,  two  prominent 

members  of  277 

Money,  Trade  and  Investments  

123,  294,  456,  644,  799 

National  grange  banks  221 

New  Banks,  Changes  In  Officers,  etc. 

152,  328,  482,  678,  829,  958 

New  chairman,  executive  council,  A. 

B.  A 916 

New  Wahl  adding  and  subtracting  at- 
tachment   438 

Our  natural  resources  239 

Practical  Banking: 

Abbreviations  518 

Acknowledgements  869 

Auditing  committee,  the  ' 517 

Banking  by  mall  again  868 

British  Income  tax,  the  45 

British  post  office  savings  orders, 

collection  of  218 

Canadian  banking  methods  219 

Collection  department  methods  735 

Don'ts  for  the  out-of-town  banker,  a 

few  220 

Endorsements  382 

Floor  plan  of  a western  bank  43 

Foreign  drafts,  a few  pointers  In 

handling  221 

Gardner,  James  P.,  practical  banking 


Gold  bullion  381 

Indorsements  In  Mexico  41 

Mexico  and  its  banking  facilities 41 

National  bank  notes,  expense  for  re- 
demption of  217 

New  German  check  law,  a few  after- 
thoughts on  518 

Pointers  In  handling  foreign  drafts, 

a few  221 

Protest  In  Cuba  221 

Question  of  protest  as  \iewed  by  the 

foreign  banker  47 

Registered  coupon  bonds  221 

Rosendale,  W.  M.  (collection  depart- 
ment methods)  735 

San  Salvador,  a short  cut  to  43 

Stopping  the  leaks  868 

Taking  one’s  work  seriously  869 

Timing  notes  42 

Too  much  system  517 

Treatment  of  foreign  items  517 

Two  cents  an  ounce  to  Great  Britain  868 

What’s  in  a name  48 

Withdrawal  of  funds  In  savings 
banks  380 


Savings  Banks: 


Denver,  savings  bank  men  at  728 

Deposit  ledger,  the  passing  of  the..  201 

Economy  In  the  savings  bank  209 

Kniffln,  W.  H.,  Jr.  (savings  banks 

in  the  United  States)  507 

Kniffln,  W.  H.,  Jr.  (the  passing  of 

the  deposit  ledger)  201 

Kniffln,  W.  H.,  Jr.  (the  savings  bank 

— a public  benefactor)  722 

Kniffln,  W.  H.,  Jr.  (the  savings  bank 

as  an  institution)  859 

Kniffln,  W.  H.,  Jr.  (the  thrift  habit)  368 
Massachusetts,  changes  In  the  sav- 
ings bank  laws  of  38 

Massachusetts  savings  bank  invest- 
ments   727 

Mead,  Victor  D.  (economy  In  the 

savings  bank)  209 

Passing  of  the  deposit  ledger,  the. . . 201 

Pennsylvania,  savings  banks  In  867 

Price,  Andrew  (a  valuable  adjunct 

to  a savings  bank)  86 

Program  of  A.  B.  A.  savings  bank 

section  373 

Savings  bank  as  an  Institution,  the  859 

Savings  bank  men  at  Denver  728 

Savings  banks  In  Pennsylvania  867 

Savings  banks  in  the  United  States  507 
Savings  bank,  the — a public  benefac- 
tor   722 

Thrift  habit,  the  368 

Valuable  adjunct  to  a savings  bank, 

a 36 

Scissorlngs  487 

Scudder,  S.  D.,  on  international  bank- 
ing, with  portrait  763 

Temporary  loans  18 

Tornquist,  Ernesto,  death  of  367 

Trust  Companies: 

American  Bankers’  Association, 
meeting  of  trust  company  section 

of  377,  719 

Comptroller’s  report,  the  603 

Herrick,  Clay,  trust  company  articles 

19,  213,  376,  603,  719 

Jackson,  A.  A.,  portrait  of  719 

Treasons  of  the  panic  of  1907  19 

Loans  and  investments,  legislative 

restrictions  on  213 

Panic  of  1907,  lessons  of  19 

Trust  companies  banks?  378 

Trust  company  section,  meeting  of. 

377,  719 

Uniform  laws  and  reports  375 

Wisconsin  trust  companies  377 

United  States  Banking  Company  545 

Watts,  F.  O..  sketch  of,  with  portrait  916 
Weeks,  John  Wingate,  sketch  of,  with 
portrait  277 


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BANKERS  MAGAZINE 

ELMER  H.  YOUNGMAN.  Editor 


SIXTY-SECOND  YEAR  JULY,  1 908  VOLUME  LXXVII.  NO.  I 


THE  REAL  ISSUE  IN  THE  FIGHT  FOR  CURRENCY 

REFORM. 


MUCH,  confusion  exists  as  to  the 
real  issue  between  the  adyocates 
of  credit  currency  and  those  who  op- 
pose that  reform.  Many  seem  to  think 
that  the  differences  arise  over  using 
bonds  or  commercial  paper  as  security 
for  bank  notes.  Others  believe  it  to 
be  a contest  between  those  who  hold 
that  notes  may  be  safely  issued  without 
specially  pledging  or  “segregating” 
the  banks’  assets  and  those  who  con- 
tend that  the  assets  should  be  lodged 
with  the  Treasury  or  some  other  cen- 
tral authority. 

While  these  details  are  of  great  im- 
portance, they  do  not  teptresent  the 
fundamental  point  at  issue,  which  is 
simply  this:  Shall  the  issue  of 

currency  and  the  handling  of  the 
public  revenues  and  expenditures  be 
controlled  by  the  people  and  in  their 
interests,  or  for  the  profit  of  a few  pet 
banks.  This  is  the  point  to  be  fought 
out,  and  it  has  already  passed  the 
academic  stage  of  discussion.  Nobody 
of  any  authority  in  banking  and 
finance  defends  a bond-secured  cur- 
rency, and  nobody  whose  financial 
opinions  are  worth  anything  condemns 
a credit  currency. 

The  currency  reform  fight  is,  there- 
fore, no  longer  a war  of  opposing 
schools  or  monetary  principles.  On 
one  side  are  those  who  want  to  manipu- 
late the  issue  of  currency  in  their  own 
interests  and  to  use  the  public  funds 
for  speculation  and  promotion  schemes, 
l 


On  the  other  side  are  those  who  are 
trying  to  have  a currency  system 
adopted  that  will  be  of  real  benefit  to 
every  section  of  the  country  and  to  all 
classes,  and  who  believe  that  the  sur- 
plus public  funds  ought  to  be,  as 
nearly  as  possible,  kept  in  the  channels 
of  legitimate  trade. 

Those  who,  like  a celebrated  ex- 
political ruler,  “work  for  their  own 
pockets  every  time,”  naturally  favor  a 
bond-secured  bank  currency  and  also 
that  a deposit  of  bonds  shall  be  re- 
quired to  secure  public  funds.  In  both 
ways  this  benefits  “the  interests.”  It 
increases  the  salability  of  their  bonds, 
and  since  the  banks  which  they  control 
are  the  principal  holders  of  the  bonds 
accepted  as  security  for  public  de- 
posits, it  also  narrows  the  field  of  com- 
petition in  bidding  for  such  deposits. 

There  is  no  division  of  opinion 
among  “the  interests”  as  to  what  they 
want.  They  make  no  concealment  of 
their  intentions  to  profit  at  the  public 
expense.  They  demand,  and  get,  a 

market  for  their  securities  by  making 
them  available  as  a basis  for  bank  cur- 
rency. They  demand,  and  get,  a large 
share  of  the  Treasury  surplus  to  swell 
their  deposits.  And  the  policy  they 
have  so  successfully  pursued  heretofore 
will  be  strengthened  and  permanently 
fastened  upon  the  country  unless  the 
bankers  and  the  people  generally  wake 
up  to  the  dangers  or  the  situation. 

l 


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THE  BANKERS  MAGAZINE. 


jyjANIFESTLY,  the  aim  of  the 
Republican  platform  adopted  at 
Chicago  was  to  commit  the  party  to  an 
unsound  policy  with  respect  to  cur- 
rency legislation.  We  give  some  facts 
in  respect  to  the  platform  in  another 
part  of  this  issue  which  strongly  sup- 
port this  view. 

While  the  course  of  the  President  and 
Mr.  Taft  in  supporting  the  Aldrich- 
Vreeland  law  is  open  to  criticism,  evi- 
dence is  not  lacking  that  they  both 
regarded  this  as  a temporary  measure 
which  they  would  be  glad  to  see  re- 
placed by  a wiser  law.  But,  appar- 
ently, the  same  interests  that  were  be- 
hind this  law  got  in  their  work  on  the 
Chicago  platform  and  doctored  it  to 
suit  their  purposes.  They  intend,  of 
course,  to  see  that  the  law  is  kept  so 
as  to  bring  the  grist  to  their  mills.  And 
they  will  succeed  unless  the  friends  of 
real  currency  reform  are  more  united 
and  more  energetic  than  they  have  been 
heretofore.  It  is  probable  that  if  the 
Fowlerites  and  the  advocates  of  the 
American  Bankers'  Association  plan 
had  united  early  in  the  last  session  of 
Congress,  and  had  kept  up  a vigorous 
fight  for  a simple  and  sensible  meas- 
ure, they  could  have  succeeded  in  get- 
ting it  passed. 

'While  the  enemies  of  currency  re- 
form are  solidly  held  together  by  “the 
cohesive  power  of  public  plunder,"  it 
ill  becomes  the  friends  of  that  reform 
to  quibble  over  trifles. 


JN  nominating  Mr.  Taft  for  Presi- 
dent the  Republicans  have  done 
what  any  business  concern  would  have 
done  in  selecting  a new  man  to  manage 
affairs — they  have  chosen  the  one  who 
is  best  equipped  by  temperament,  abil- 
ity and  experience  to  do  the  required 
work.  It  is  doubtful  if  any  candidate 
for  the  Presidency  has  been  better 


fitted  to  discharge  the  duties  of  that 
high  office.  Mr.  Taft's  training  and 
experience  as  a lawyer  and  his  service 
on  the  bench  gave  him  that  habit  of 
piind  which  is  essential  in  avoiding 
rash  action,  while  the  administrative 
ability  which  he  has  displayed  in  deal- 
ing with  difficult  problems  in  the 
Philippines,  in  Cuba,  and  in  Panama, 
show  him  to  be  possessed  of  exceptional 
tact  and  capacity.  The  personal  qual- 
ities of  the  Republican  nominee  are 
also  such  as  will  add  greatly  to  his 
chances  of  success  at  the  polls.  He  is 
not  only  large-minded,  but  large- 
hearted,  and  should  he  be  elected  his 
policies  will  undoubtedly  be  shaped 
according  to  conscientious  convictions. 


POLITICAL  forecasts  made  in 
June,  before  one  of  the  leading 
candidates  has  even  been  named,  are 
apt  to  be  in  need  of  careful  revision 
later  on  when  the  candidates  are  all 
known  and  the  issues  clearly  defined. 

Campaigns  for  the  Presidency  are 
subject  to  all  the  vicissitudes  which 
play  such  an  important  part  in  regu- 
lating mundane  affairs  in  general,  and 
are  also  liable  to  be  powerfully  affected 
by  influences  peculiar  to  themselves. 

If  the  Democrats  could  put  up  a 
man  who  would  be  a match  for  Mr. 
Taft  in  experience  and  ability,  they 
would,  barring  unforseeable  accidents, 
have  a good  chance  of  winning.  There 
has  only  recently  been  a panic,  fol- 
lowed by  considerable  depression  of 
trade  and  industry  with  consequent  loss 
of  employment  to  workingmen,  of  in- 
come to  capitalists,  and  of  business  to 
merchants.  Whether  justly  or  not,  the 
party  in  power  is  liable  to  be  held  re- 
sponsible for  these  misfortunes.  This 
will  tend  to  work  against  Republican 
success,  but  to  what  extent  no  one  can 
say. 


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COMMENT. 


If  the  Democrats  should  nominate  a 
man  of  commanding  ability,  of  the 
“safe  and  sane  type,”  he  might  draw 
largely  from  those  who  would  otherwise 
vote  the  Republican  ticket.  But  at  the 
time  this  is  written  Mr.  Bryan  appears 
to  be  in  the  lead  for  the  Democratic 
nomination.  Having  already  suffered 
two  ^defeats,  he  will  enter  the  race  at 
a disadvantage. 

But  it  is  not  to  be  plain  sailing  for 
the  Republicans,  by  any  means.  Al- 
though Mr.  Taft's  ability  and  charac- 
ter are  of  the  highest,  there  are  many 
signs  of  dissatisfaction  with  some 
very  powerful  elements  in  the  Republi- 
can party.  But  a short  time  ago,  in 
conversation  with  the  editor  of  this 
Magazine,  one  of  the  oldest  and  most 
conservative  bankers  of  this  country, 
and  a life-long  Republican,  said:  “The 
Republican  party  has  become  a stench 
in  my  nostrils,  and  I would  get  out  of 
it  at  once,  if  I knew  where  else  to  go.” 
This  feeling  is  growing  among  those 
who  know  something  of  the  inner  his- 
tory of  the  once  “Grand  Old  Party.” 
The  concessions  made  to  certain  in- 
terests in  passing  the  Aldrich-Vreeland 
currency  law,  the  high  tariff,  the  way 
a few  banks  have  been  allowed  to  profit 
by  the  use  of  public  funds,  the 
double-faced  “injunction  plank”  in  the 
platform — these  and  other  sins  of 
omission  and  commission,  will  be  a 
heavy  load  for  the  Republican  elephant 
to  carry  in  the  coming  canvass. 

If  the  Democrats  could  present  a 
strong  constructive  programme  and  a 
candidate  who  would  command  confi- 
dence, they  might,  with  the  other  cir- 
cumstances in  their  favor,  manage  to 
overcome  Mr.  Taft's  personal  popular- 
ity and  elect  their  man.  There  is 
nothing  in  the  recent  history  of  the 
party,  however,  to  justify  the  expecta- 
tion that  they  will  do  otherwise  than 
repeat  the  blunders  of  previous  cam- 
paigns. 


J>ECULIAR  arguments  are  some- 
times advanced  in  favor  of  the 
central  bank  proposition.  In  a recent 
pamphlet  by  Mr.  Paul  M.  Warburg, 
entitled  “A  Modified  Central  Bank  of 
Issue,”  we  find  the  following: 

“A  bank  rediscounting  with  a cen- 
tral bank  receives  a loan  for  a given 
period,  and  upon  this  advance  it  may 
safely  base  its  own  commitments  for  the 
accommodation  of  its  customers.  The 
issuing  of  notes  against  its  assets  by  a 
national  bank  means  the  creation  of 
additional  depositors  who  may  with- 
draw their  money  any  day  like  any 
other  depositor.  It  is  unsafe  for  a 
bank  to  accommodate  its  customers  on 
resouroes  which  may  be  withdrawn  at 
any  time.  This  is  a most  important 
and  f undamental  point.” 

Issuing  bank  notes  does  not,  in  all 
cases,  mean  “the  creation  of  additional 
depositors,”  as  a single  illustration  will 
show.  Suppose  a man  has  discounted 
his  note  at  a bank,  and  has  had  the 
amount  placed  to  his  credit,  taking  as 
evidence  thereof  the  ordinary  bank- 
book. A week  later  he  comes  to  the 
bank  and  presents  a check  against  his 
deposit.  In  payment  of  the  check,  the 
bank  hands  out  its  notes.  No  addi- 
tional depositor  has  been  created,  and 
for  the  time  being  at  least  the  amount 
of  the  bank's  deposit  has  heen  de- 
creased to  the  extent  of  the  notes  is- 
sued. 

But  if  it  be  admitted,  broadly  speak- 
ing, that  the  issue  of  notes  tends  to  add 
to  the  number  and  amount  of  deposits, 
which  is  perhaps  what  Mr.  Warburg 
means,  is  that  fact  objectionable?  Mr. 
Warburg  says  that  these  additional 
depositors  may  withdraw  their  money 
any  day  like  any  other  depositor.  Sup- 
pose they  may?  Should  that  fact 
necessarily  cause  the  bank  any  con- 
cern? If  the  bank's  capital  equipment 
is  large  enough  to  enable  it  to  provide 
sufficient  means,  either  in  the  shape  of 


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THE  BANKERS  MAGAZINE. 


gold  or  quicklv-realizable  assets,  to  pay 
all  claims  on  demand,  it  need  not  worry 
any  over  having  additional  deposits 
that  may  be  withdrawn  at  any  time. 
And  if  its  cash  means  are  insufficient 
it  would  certainly  be  in  a worse  situa- 
tion with  respect  to  its  checking  ac- 
counts than  it  would  as  to  its  note 
issues.  For  the  notes  would  not  be 
presented  for  redemption  with  any- 
thing like  the  same  rapidity  as  the 
checks. 

Furthermore,  if  a bank  issues  its 
notes,  the  only  cost  would  be  that  aris- 
ing out  of  the  provision  of  an  adequate 
gold  reserve.  But  if  it  rediscounted 
with  a central  bank  it  would  have  to 
pay  interest  on  the  amount  borrowed; 
and,  in  the  opinion  of  some  banking 
authorities,  it  ought  also  to  hold  a re- 
serve against  the  rediscounts  for  whose 
payment  the  borrowing  bank  has  be- 
come liable. 


r | 'HE  term  “pet  banks,”  which  orig- 
inated in  Jackson's  time,  prom- 
ises to  be  revived  under  the  operations 
of  the  Aldrich-Vreeland  banking  law. 
In  the  Treasury  circular  describing 
the  operations  of  that  part  of  the  law, 
referring  to  public  deposits  it  is  stated 
that  “Interest  will  be  paid  on  the  en- 
tire amount  held  by  temporary  or 
special  depositaries,  and  on  the  amount 
held  by  regular  depositaries  in  excess 
of  the  amount  needed  for  the  transac- 
tion of  public  business.” 

This  gives  the  Secretary  of  the 
Treasury  great  latitude  to  discriminate 
in  favor  of  certain  banks  by  designat- 
ing them  as  “regular  depositaries,” 
and  by  deciding  what  amount  is  “need- 
ed for  the  transaction  of  public  busi- 
ness;” that  is,  the  Secretary  of  the 
Treasury  may  require  certain  banks  to 
pay  interest  on  all  their  public  deposits, 
and  he  may  decide  as  to  what  part  of 
such  deposits  in  other  banks  are  exempt 
from  the  payment  of  interest. 


As  we  have  already  pointed  out 
(May  Bankers  Magazine,  pp.  692, 
693),  the  Aldrich  bill  entrusts  the 
Secretary  of  the  Treasury  with  tre- 
mendous power.  For  instance,  he  is 
made  the  judge  as  to  whether  local 
business  conditions  warrant  the  issue 
of  more  currency,  though  he  can  not 
possibly  know  anything  about  the  busi- 
ness of  the  various  localities.  He  is, 
as  already  shown,  empowered  with  au- 
thority to  favor  certain  banks. 

The  Comptroller  of  the  Currency 
has  been  reduced,  so  far  as  the  Aldrich- 
Vreeland  bill  could  do  so,  to  a subor- 
dinate position,  and  the  powers  of  the 
Secretary  of  the  Treasury  correspond- 
ingly enlarged.  We  see  no  evidence 
that  this  was  done  in  the  public  inter- 
est. 


^^N  interesting  subject  of  investiga- 
tion during  the  vacation  period 
will  be  found  in  studying  the  qualifica- 
tions that  led  to  the  appointment  of 
the  several  members  of  the  Monetary 
Commission  provided  for  in  the  tail  to 
the  Aldrich-Vreeland  bill  kite. 

At  the  beginning  of  the  list  stands 
the  name  of  Nelson  W.  Aldrich, 
author  of  a bill  almost  universally 
condemned  by  expert  financial  opinion. 
Mr.  Ai-lison,  the  veteran  Senator  from 
Iowa,  has  some  claim  to  distinction  as 
one  of  the  authors  of  the  Bland-Allison 
Act,  which  fastened  upon  the  country's 
currency  several  hundred  million  dol- 
lars of  cheap  silver,  made  a full  legal 
tender.  Messrs.  Hale,  Daniel, 
Money,  Burrows,  and  Knox  have  not 
distinguished  themselves,  so  far  as  we 
know,  for  financial  ability.  Mr.  Tel- 
ler will  be  remembered  as  one  of  the 
strongest  champions  of  the  free  and 
unlimited  coinage  of  silver  at  the  16 
to  1 ratio.  He  bade  his  party  a tearful 
farewell  at  St.  Louis  in  1896  because 
it  would  not  come  out  in  favor  of  that 
great  reform. 


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COMMENT. 


5 


Mr.  Vrekland,  who  heads  the  list  of 
members  representing  the  House, 
leaped  into  fame  last  spring  by  having 
his  name  coupled  with  the  Vreeland 
bill,  which  in  the  form  originally 
passed  by  the  House  was  far  less  ob- 
jectionable than  the  bill  that  finally 
became  a law.  The  other  House  mem- 
bers, with  two  exceptions,  have  a more 
or  less  colorless  record  on  financial 
questions.  They  were  appointed,  per- 
haps, with  the  view  that  numbers  would 
add  to  the  respectability  of  the  com- 
mission. 

The  exceptions  mentioned  are  Mr. 
Burton  of  Ohio  and  Mr.  Weeks  of 
Massachusetts.  Both  of  these  gentle- 
men have  given  serious  study  to  the 
bank-note  currency  question,  and  their 
influence  so  far  as  it  can  be  made 
effectual,  will  undoubtedly  be  in  favor 
of  improvement  in  the  existing  system. 
They  are  in  such  a hopeless  minority, 
however,  that  they  can  hardly  expect 
to  achieve  any  substantial  advantage 
over  the  unprogrcssive  element  that 
dominates  the  commission. 


M EASURES  of  more  than  ordinary 
importance  to  bankers  are  to  be 
considered  at  the  National  Conference 
of  the  Commissioners  on  Uniform  State 
Laws,  to  be  held  at  Seattle,  Washing- 
ton, August  21,  22  and  24.  The  meas- 
ures referred  to  are  the  Uniform  Law 
of  Bills  of  Lading  and  the  Uniform 
Law  of  Certificates  of  Stock.  Tenta- 
tive drafts  of  these  acts  have  already 
been  prepared  and  circulated  for  sug- 
gestions and  criticism.  Further  hear- 
ings are  to  be  had  before  the  appro- 
priate committee  on  August  20  at 
Seattle. 

This  work  marks  a notable  advance 
in  the  reformation  of  our  commercial 
laws,  and  will  greatly  tend  toward 
safety  and  simplicity  in  the  trans- 
actions reached  by  the  proposed  laws. 


Before  these  changes  in  the  laws 
mentioned  can  take  effect,  they  must 
be  passed  by  the  legislatures  of  the 
various  states.  After  running  the 
gauntlet  of  forty-six  legislative  bodies, 
the  uniformity  of  the  acts  may  be  con- 
siderably impaired,  as  was  the  case 
with  the  Uniform  Negotiable  Instru- 
ments Act.  And  when  the  laws  come 
to  pass  the  scrutiny  of  the  almost  in- 
numerable state  and  Federal  courts, 
the  different  constructions  put  upon 
them  will  so  change  their  original 
shape  that  the  authors  of  the  laws 
would  hardly  recognize  them. 

Yet,  with  all  these  unavoidable  draw- 
backs, for  which  the  Commissioners  on 
Uniform  State  Laws  are  in  no  wise 
responsible,  the  enactment  of  these 
new  measures  will  secure  substantial 
uniformity  in  the  laws  governing  bills 
of  lading  and  transfers  of  stock  cer- 
tificates. 

Since  the  Constitution  of  the  United 
States  gives  Congress  power  to  regu- 
late commerce  between  the  states,  it  is 
difficult  for  a layman  to  understand 
why  this  power  should  not  extend  to 
the  instruments  necessary  to  carry  on 
such  commerce.  Why  should  Congress 
have  authority  to  regulate  bank  notes 
and  not  bank  checks? 

As  the  relations  existing  between  the 
people  of  the  several  states  become 
closer,  the  necessity  for  bringing  the 
state  laws  into  something  resembling 
homogeneousness  becomes  more  and 
more  urgent.  The  diversity  of  these 
laws,  which  has  so  long  prevailed,  is  as 
great  a clog  on  our  commercial  prog- 
ress as  is  the  conglomerate  monetary 
system  of  China  upon  the  prosperity 
of  that  country.  Did  we  not  cling  so 
fondly  to  ancient  superstitions,  the 
work  now  being  done  by  the  Commis- 
sioners on  Uniform  State  Laws  could 
be  accomplished  by  Congress,  for  the 
whole  country  at  once,  and  with  ' a 
great  saving  of  time  and  labor. 


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THE  BANKERS  MAGAZINE. 


JT  is  reported  that  Professor  A. 

Piatt  Andrew,  professor  of  econ- 
omics in  Harvard  University,  has  been 
appointed  as  an  expert  to  serve  on  the 
Monetary  Commission.  As  shown  by 
his  article  in  the  April  issue  of  the 
Magazine,  Professor  Andrew  does 
not  approve  of  the  Treasury  policy  in 
feeding  the  public  funds  to  the  banks. 
He  takes  the  sound  position  in  this 
article  that  the  resort  to  extraordinary 
means  by  the  Secretary  of  the  Treas- 
ury to  “aid  the  money  market”  should 
be  stopped,  and  that  automatic  and  in- 
voluntary relations  should  be  estab- 
lished between  the  banks  and  the 
Treasury. 

Professor  Andrew  shows,  in  the  ar- 
ticle referred  to,  just  how  the  present 
Treasury  policy  has  worked,  and  how 
one  bank  in  particular  has  profited  by 
it.  Perhaps  it  is  too  much  to  hope  that 
his  sensible  recommendations  will  re- 
ceive serious  consideration  by  the 
Monetary  Commission. 


rJ''HAT  was  a strange  case  where  the 
promotion  of  a teller  in  a New 
York  bank  caused  the  discovery  of  a 
shortage  of  several  thousand  dollars  in 
his  accounts  and  led  to  the  suicide  of 
the  defaulting  employee.  After  twenty 
years'  service  he  was  in  receipt  of  a 
salary  of  but  $1,500  a year,  and  hav- 
ing a wife  and  family,  he  found  this 
sum  inadequate  for  their  proper  sup- 
port, and  made  up  the  deficiency  by 
taking  about  $9,000  from  the  bank  in 
the  space  of  five  years.  For  some  time 
he  had  occupied  the  post  of  receiving 
teller,  and  by  manipulation  of  the  ac- 
counts was  able  to  conceal  the  short- 
age. But  on  being  promoted  to  the 
post  of  paying  teller,  the  deception 
could  no  longer  be  maintained,  and 
discovery  and  suicide  followed. 

Of  course,  the  insufficiency  of  the 
salary  is  blamed  for  the  tragedy.  On 


the  other  hand,  the  “Springfield 
Republican,”  in  commenting  on  the 
event  says: 

“It  must  be  obvious  that  the  bank 
has  an  impossible  task  on  its  hands 
when  it  undertakes  to  lift  its  employees 
above  the  temptation  to  steal  by  lifting 
their  salaries;  for  the  larger  salary 
operates  to  broaden  the  circle  of  living 
and  so  to  widen  the  area  of  exposure 
to  temptation.  Men  cannot  be  hired  to 
be  honest;  and  the  man  who  is  honest 
only  because  paid  for  being  so  is  not 
an  honest  man  and  is  not  to  be  trusted 
even  within  the  limits  of  the  honesty- 
for-money  bargain.” 

It  may  be  in  this  particular  instance 
that  the  employee  did  not  present  his 
case  in  the  proper  light  to  the  bank. 
A great  and  powerful  institution  could 
hardly  have  failed  to  do  justice  to  an 
employee  who  had  been  in  its  service 
for  so  long  and  who  had,  with  the  ex- 
ception of  a comparatively  short  pe- 
riod, proved  faithful  to  the  bank's  in- 
terests. That  appreciation  of  his 
services  was  not  lacking  was  shown  by 
the  act  of  the  bank  in  making  the  pro- 
motion. The  same  courage  that  was 
required  to  take  the  funds  of  the  bank 
and  cover  up  the  shortage,  if  it  had 
been  applied  in  the  right  direction, 
might  have  secured  the  payment  of  an 
adequate  salary  and  prevented  the  un- 
happy  catastrophe. 

It  is  quite  easy  to  say  that  stealing 
is  not  the  proper  way  to  remedy  a de- 
ficiency of  income,  and  that  if  one  kind 
of  employment  does  not  afford  a living, 
a change  should  be  made.  But  there 
are  often  practical  difficulties  in  the 
way  of  making  a change  in  one's  man- 
ner of  making  a living.  A man  who 
has  spent  twenty  years  in  a bank  may 
find  it  very  hard  to  get  into  other  suit- 
able employment  that  will  yield  a bet- 
ter income. 

Where  a bank  is  making  good  profits 
it  ought  to  see  that  its  employees  are 


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COMMENT. 


7 


properly  paid.  Where  the  profits  will 
not  warrant  the  payment  of  a fair  sal- 
ary an  employee  must  either  change 
his  employment  or  reduce  his  scale  of 
living,  however  hard  either  of  • these 
expedients  may  seem.  No  one  is  justi- 
fied in  living  on  a scale  that  compels 
a resort  to  criminal  expedients  to  main- 
tain it. 

While,  under  any  conceivable  cir- 
cumstances, banks  have  a right  to  ex- 
pect absolute  honesty  on  the  part  of 
employees,  they  are  not  absolved  from 
the  obligation  of  dealing  justly  with 
those  who  constitute  the  banks’  work- 
ing machinery. 

Bank  officers  carefully  scrutinize  the 
affairs  of  their  borrowers,  but  are 
sometimes  indifferent  toward  their  em- 
ployees. This  is  not  good  business 
policy.  The  wise  bank  officer  will 
watch  his  employees  as  carefully  as  he 
watches  his  discounts. 


OUITE  generally  it  is  assumed  that 
Mr.  Taft’s  election  to  the  Presi- 
dency will  mean  a period  of  tranquillity 
compared  to  the  strenuous  activities  of 
President  Roosevelt. 

Even  the  warm  admirers  of  Mr. 
Roosevelt’s  policies  now  realize  that 
he  went  about  his  work  a little  more 
roughly  and  more  vociferously  than 
necessary.  The  surgeon  who  comes  to 
amputate  a limb  uses  unnecessary 
harshness  in  kicking  the  patient  and 
calling  him  a liar. 

Benjamin  Harrison  once,  in  prais- 
ing Mr.  Roosevelt,  said  that  the  only 
fault  he  could  find  with  him  was  that 
he  wanted  to  reform  all  the  existing 
evils  in  the  universe  between  sunrise 
and  sunset.  That  is  not  a bad  fault, 
to  be  sure.  But  when  this  disposition 
was  applied  to  business  affairs  whose 
delicate  machinery  had  become  accus- 
tomed to  methods  long  in  use,  the  shock 
caused  was  so  great  that  it  came  very 


near  dislocating  the  entire  business 
mechanism  of  the  country. 

Some  of  the  devices  of  modern  busi- 
ness, though  distasteful  to  the  moralist, 
have  been  adopted  out  of  sheer  neces- 
sity. Great  transactions,  inseparable 
from  the  growth  in  wealth  and  popu- 
lation, call  for  a corresponding  aug- 
mentation of  capital  in  large  masses, 
which  can  only  be  secured  by  effecting 
combinations  among  a number  of 
smaller  concerns.  The  accumulated 
wisdom  of  centuries  of  experience  has 
been  drawn  on  to  furnish  the  means  of 
adapting  our  business  machinery  to 
modern  requirements.  Abuses  have 
developed,  which  must  be  patiently 
studied  and  the  right  remedy  soberly 
and  inflexibly  applied.  If  Mr.  Taft 
shall  use  a little  more  patience  than 
Mr.  Roosevelt  has  shown,  and  not 
declaim  about  “predatory  wealth” 
quite  so  vehemently  and  so  frequently, 
he  may  accomplish  just  as  much  in  the 
way  of  reform  without  at  the  same 
time  inflicting  harm  upon  the  lawful 
business  of  the  country. 


DEFICIENT  revenues  are  begin- 
ning to  give  the  Treasury  offi- 
cials some  concern.  The  slackening  of 
business  has  affected  internal  revenue 
receipts  unfavorably,  and  imports  have 
sharply  fallen  off,  thus  reducing  the 
customs  receipts. 

But  while  the  Government’s  income 
in  the  last  eleven  months  was  reduced 
by  $56,000,000,  the  expenditures  were 
increased  by  $72,00,000.  Of  course, 
in  making  appropriations  Congress 
can  not  know,  necessarily,  that  the 
revenues  will  decrease.  But  this  year, 
with  the  figures  before  it,  there  was  no 
disposition  to  economize,  and  the  ap- 
propriations approached  record-break- 
ing totals. 

Instead  of  pruning  expenses,  it  is 
much  easier  and  more  popular  for 


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THE  BANKERS  MAGAZINE. 


Congress  to  be  liberal  in  making  ap- 
propriations, looking  to  borrowing  to 
make  up  any  deficit  that  may  result 
from  this  policy. 


^^CCORDING  to  a ruling  of  the 
Auditor  of  Public  Accounts  of 
the  State  of  Illinois,  who  is  the  super- 
vising officer  of  the  state  banks  and 
trust  companies,  it  is  unlawful  for 
banks  to  give  collateral  security  for 
deposits.  The  question  arose  in  con- 
nection with  a fraternal  society  that 
desired  to  place  its  funds  on  deposit 
with  a bank,  but  wished  the  bank  to 
lodge  collateral  securities  in  the  hands 
of  the  society  as  a guaranty  of  the 
safety  of  the  deposit. 

In  his  ruling  the  Auditor  said  that  a 
transaction  of  this  kind  could  hardly 
be  regarded  as  a “deposit,”  but  must 
be  considered  as  money  borrowed  by 
the  bank.  He  further  said  that  to  per- 
mit an  arrangement  of  this  sort  would 
be  to  divide  the  depositors  of  a bank 
into  two  classes,  secured  and  unsecured, 
and  declared  that  neither  the  laws  of 
Illinois  nor  the  Federal  banking  act 
contemplates  the  securing  of  deposits. 

The  National  Bank  Act  certainly 
does  contemplate  the  securing  of  de- 
posits, so  far  as  respects  the  funds  be- 
longing to  the  United  States,  and 
rigidly  insists  on  the  deposit  of  collat- 
eral to  guard  against  the  possibility  of 
loss.  As  the  Auditor  pertinently  says, 
if  a fraternal  society  may  justly  de- 
mand sqch  security,  why  may  not  an 
individual  do  the  same  thing?  And  it 
may  be  asked,  if  the  National  Govern- 
ment may  require  banks  to  put  lip 
collateral  for  deposits,  why  may  not 
an  individual  insist  on  being  as  fully 
secured?  It  surely  can  not  be  con- 
tended that  the  individual  has  better 
means  than  the  Government  has  for 
obtaining  accurate  information  of  the 
safety  of  banks.  On  the  contrary,  the 


banks  in  which  the  Government  makes 
deposits  are  under  the  watchful  eye  of 
its  own  agents,  who  are  authorized  to 
inspect  the  books  and  to  make  a 
thorough  examination  of  the  banks* 
securities  and  of  their  business  methods. 
Yet  with  all  its  power  of  examining 
and  supervising  the  national  banks 
which  it  uses  as  depositaries  of  public 
moneys,  the  Government  of  the  United 
States  refuses  to  trust  the  banks  to  the 
extent  of  a single  dollar. 

It  may  be  said  that  the  deposits  of 
individuals  with  banks  are  not  the 
same  in  character  as  those  made  by  the 
Government.  It  is  perhaps  more  nearly 
accurate  to  say  of  these  “deposits,” 
as  the  Auditor  of  Illinois  did  of  those 
in  the  case  above  referred  to,  that  they 
are  loans,  secured  by  collateral,  and 
not  deposits  in  the  strict  meaning  of 
the  term. 

But  in  any  case,  while  the  Govern- 
ment ought  to  take  care  that  the  public 
funds  placed  with  the  banks  are  ade- 
quately secured,  to  exact  the  deposit  of 
an  equal  amount  of  securities  with  the 
Treasury  would  seem  to  be  going  quite 
beyond  the  bounds  of  reason. 


rJ'HERE  are  two  banks  in  New 
York — the  American  Exchange 
National  and  the  Chemical — that  re- 
fused to  accept  Government  deposits 
on  the  terms  prescribed  in  the  new 
banking  law.  These  banks  do  not  pay 
interest  on  deposits,  and  although  the 
payment  of  one  per  cent,  interest 
which  -the  law  requires  would  fiave 
been  a comparatively  trifling  matter  so 
far  as  the  cost  was  concerned,  these 
banks  refused  to  alter  their  established 
policy,  even  for  the  sake  of  being 
“designated  depositaries  of  the  United 
States.” 

If  it  were  practicable  for  all  the 
banks  to  follow  the  lead  of  these  two 
conservative  institutions,  the  United 


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COMMENT. 


9 


States  would  be  without  a public  depos- 
itary in  New  York  (except  for  such 
amounts  which  the  banks  may  hold 
under  the  law  without  the  payment  of 
interest  thereon),  and  the  whole  busi- 
ness of  commercial  banking  in  this  city 
would  be  lifted  to  a healthier  plane. 

Bui  with  the  trust  companies  doing 
a general  banking  business  and  offer- 
ing to  pay  interest  on  deposits,  it  is 
an  impossibility  for  the  ordinary  com- 
mercial banks  to  do  otherwise  than  bid 
for  deposits  in  the  same  manner,  even 
were  they  so  disposed.  And  so  long  as 
the  banks  in  other  cities  within  the 
competing  territory  of  the  New  York 
banks  continue  to  pay  interest  on  de- 
posits, the  banks  of  this  city  will  have 
to  do  likewise  as  a measure  of  self- 
protection. 

Even  if  there  were  no  trust  com- 
panies, it  can  not  be  said  with  any 
degree  of  certainty  that  the  banks 
would  not  offer  interest  on  deposits. 
It  would,  however,  in  that  case,  be 
easier  than  it  now  is  for  them  to  dis- 
continue the  practice  if  they  wished 
to  do  so. 


the  spring  meeting  of  the  execu- 
tive council  of  the  American 
Bankers’  Association  at  Lakewood,  N. 
J.,  an  interesting  report  was  made  by 
the  Committee  on  Credit  Information, 
of  which  Mr.  Joseph  T.  Talbert, 
vice-president  of  the  Commercial 
National  Bank  of  Chicago  is  chairman. 

The  report  took  up  the  subject  of 
the  purchase  of  commercial  paper  by 
the  banks,  through  note  brokers,  and 
called  attention  to  abuses  that  have  de- 
veloped in  the  course  of  such  business. 
After  considering  various  means  of 
correcting  these  abuses,  the  report 
says: 

“The  correction  of  abuses,  and  the 
proper  safeguarding  of  credit  as  far 
as  it  can  be  done  at  all  in  the  purchase 
of  paper,  appears  to  lie  in  co-operation 


between  the  banks  and  the  best  of  the 
note  brokers.  The  only  practical 
means  of  procuring  such  co-operation, 
if  any  exists  at  all,  is  through  the 
clearing-houses.  The  real  difficulty  in 
gauging  credits  is  to  get  at  the  truth 
and  the  whole  truth.  This  is  nearly 
always  inaccessible,  but  even  when  at- 
tained the  credit  man  is  not  often  in 
position  to  know  absolutely  that  the 
information  before  him  is  the  whole 
truth.  Aside  from  the  relatively  few 
cases  of  barefaced  fraud  and  dishon- 
esty, against  the  happening  of  which 
there  can  be  no  protection,  severe 
losses  are  nearly  always  sustained  be- 
cause of  misleading  statements  and  of 
incomplete  knowledge  of  the  facts.  It 
seems  clear,  therefore,  that  the  greatest 
measure  of  protection  lies  in  bringing 
about  through  co-operation  of  clearing- 
house banks  a system  of  annual  audits 
of  the  books  and  accounts  of  all  con- 
cerns selling  paper  through  note 
brokers.” 

This  suggestion  seems  to  be  practi- 
cable, and  if  it  shall  be  carried  out,  a 
check  will  be  placed  upon  the  easy 
manufacture  of  “commercial  paper,” 
and  the  undue  extension  of  credit. 

Every  effort  made  to  enhance  the 
safety  of  commercial  paper  tends  to 
promote  the  soundness  of  the  country’s 
banking  and  business  transactions. 

The  labors  of  this  committee  are 
most  important,  and  it  is  to  be  hoped 
that  the  report  which  will  be  made  at 
the  Denver  convention  of  the  American 
Bankers’  Association  may  form  the 
basis  of  favorable  action  in  line  with 
the  work  already  done. 


J^EW  Presidents  have  rendered 
greater  service  to  the  cause  of 
sound  money  than  Mr.  Cleveland, 
whose  death  occurred  last  month. 
Whether  the  run  on  the  Treasury  made 
in  his  second  Administration  was  due 


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THE  BANKERS  MAGAZINE. 


to  deficient  revenues,  to  an  unfavorable 
state  of  the  foreign  trade,  or  to  the 
large  purchases  of  silver,  does  not  mat- 
ter much  so  far  as  Mr.  Cleveland's 
action  is  concerned.  He  found  the 
Treasury  gold  running  down,  and  fail- 
ing to  replenish  it  by  sales  of  bonds,  he 
resorted  to  the  device  of  buying  gold 
with  bonds  and  at  the  same  time  mak- 
ing a contract  with  the  Belmont-Morgan 
syndicate  to  maintain  the  Treasury 
gold  at  a certain  figure.  This  expedi- 
ent proved  successful,  and  the  threat- 
ened suspension  of  gold  payments  was 
avoided. 

Mr.  Cleveland  not  only  defended 
the  gold  standard  from  the  assaults 
made  upon  it,  but  he  practically  forced 
Congress  to  repeal  the  silver-purchas- 
ing clause  of  the  Sherman  Act,  thus 
reversing  the  country's  policy  of 
“doing  something  for  silver,”  and  pre- 
paring the  way  for  strengthening  the 
gold  standard  and  making  it  something 
more  than  a thory. 

Had  Mr.  Cleveland  been  in  power 
in  later  years,  he  would  undoubtedly 
have  championed  the  cause  of  credit 
bank-note  currency,  and  with  his  force- 
ful personality  would  have  carried  it 
to  success. 

Grover  Cleveland  had  many  sub- 
stantial claims  to  the  affectionate  re- 
membrance of  his  countrymen,  and  by 
no  means  the  least  of  these  were  the 
services  he  rendered  to  the  cause  of 
sound  and  honest  money. 


IMMINENT  banking  authorities, 
when  considering  the  note-issuing 
functions  of  the  banks,  seem  to  get 
enveloped  and  befogged  in  the  clouds 
and  mists  that  have  been  engendered 
by  the  endless  controversy  over  a really 
simple  matter. 

Mystification  has  ever  been  the  re- 
liance of  those  who  seek  to  hold  the 
masses  of  mankind  under  their  domin- 


ion. The  plain  truths  of  religion  have 
been  so  obscured  by  irrelevant  doc- 
trines and  creeds  that  it  has  become 
almost  a hopeless  task  to  extract  the 
grain  of  wheat  from  the  mass  of  chaff 
in  which  it  has  become  hidden.  The 
quack  doctor  may  generally  be  recog- 
nized by  his  employment  of  medical 
terms  which  the  layman  can  not  under- 
stand. Pseudo-political  economists  may 
be  “spotted”  by  the  very  profun- 
dity and  complexity  of  their  views. 
They  involve  themselves  in  a mass  of 
technicalities  and  fine-spun  theories 
which  neither  they  nor  any  one  else 
can  comprehend. 

The  ease  with  which  mankind  may 
be  mystified  accounts  for  the  slow 
progress  of  currency  reform  in  the 
United  States.  Quacks  and  cuttle- 
fishes are  doing  all  they  can  to  obscure 
the  plain  simple  issues  involved.  If 
the  movement  is  to  attain  sufficient 
strength  to  carry  it  to  success,  it  must 
be  championed  by  some  man  of  force- 
ful personality  who  possesses  the  ca- 
pacity to  present  the  whole  question  in 
such  a plain  and  straightforward  man- 
ner that  anyone  of  ordinary  intelli- 
gence can  understand  it. 


NOVEL  LOCATION  FOR  A BANK. 


A 


DISPATCH  from  Reno,  Nevada, 
under  date  of  June  24  says: 


State  Bank  Examiner  Hofer  has  returned 
from  Rawhide  after  making  an  examination 
of  the  First  Bank  of  Rawhide  and  the  Mer- 
chants and  Miners  Bank.  He  also  examined 
the  Bank  of  Wonder  and  declares  that  all 
three  are  insolvent.  He  says  the  Merchants 
and  Miners  may  be  able  to  settle  its  claims 
it  creditors  do  not  press  them. 

The  Northern  Saloon,  run  by  Tex  Rickard 
at  Rawhide,  has  practically  assumed  all 
banking  operations.  Last  night  Rickard 
came  to  Reno  with  several  thousand  dollars9 
worth  of  checks  which  he  cashed.  Rickard 
has  arranged  to  serve  as  a clearing  house  for 
Rawhide  merchants  and  will  do  the  banking 
business  over  his  bar. 


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THE  CURRENCY  PLANK  IN  THE  REPUBLICAN 

PLATFORM. 


CJHORTLY  before  the  assembling  of 
the  Republican  National  Conven- 
tion at  Chicago,  the  New  York 
“Times”  printed  what  purported  to  be 
a tentative  draft  of  the  Republican 
platform.  It  was  commonly  under- 
stood that  this  preliminary  draft  of  the 


liminary  draft,  together  with  the  al- 
terations. 

We  reproduce  herewith  from  the 
“Times”  the  original  draft  of  the 
plank  relating  to  Currency  Legislation, 
together  with  the  changes  that  were 
made  before  its  adoption: 


We  approve  the  emer-i 

CarrtMf  gency  measures*  adopted 
tcfiilatlo.  by  the  Government  dur*4 
log  'the  recent  financial 
disturbance,  and  especially  commend  the 
t passage  by  the  last  session  of  Congress 
vf  the  lews  pass  ey  oneelmews^  designed  to 
protect  the  country  from  a repetition  of 
such  slrlngency^only  -WH4  thew  eaw  be 
celsbliehsd  a permanent  taeranrur  system 


that  will  ovoid  all  emergeneiss.  The  Re-| 
publican  Party  la  committed  ta  the  devel*; 
opment  of  such  a permanent  system.  >re< 
vrponding  to  our  greater  needs',  and  in  di ndj 
I mi  all  reapecte  with  the  most  progressive! 
nations  of  the  world :*and  the  appointment 
of  the  monetary  comiriissioit  by  the  pres* 
ent  Congress,  which  will  impartially  in* 
vest? gate  all  proposed  methods,  insured 
the  earjy  realization  of  this  purpose. 

•The  present  currency  laws  have  fully 
Justified  their  adoption,  bui  an  expanding 
commerce,  a marvelous  growth  in  wealth 
and  population,  multiplying  the  centres  of 
distribution,  increasing  the  demand  for 
the  movement  of  crops  in  th+  West  and 
fkftith.  apd  entailing  periodic  changes  ini 
monetary  conditions,  disclose  the  need  of1 
|'a  more  elastic  and  adaptable  system.  Such 
a system  must  meet  the  requirements  of 
agriculturists,  manufacturers,  merchants 
and  business  men  general ryJOnSfomHic  in 
ooeratluti.  minimising  the  fluctuations  in 
interest  rates,  and.  above  all.  * must  be 
In  harmony  with  that  Republican  doctrine 
which  insists  that  every  dollar  shall  be 
based  upon*  rede  sin  able  Inf  ana  am  good r 
as*  gold. 

In  line  with  the  purpose  he?*  declared 
to  secure  by  every*  wise  means  greater 
eafety  and  stability  in  the  banking  and 
currency  system.  *w«f  favor  the  estab- 
lishment-of  postal  savings  banks  for  the 
people,  upon  principles  embodied  in  the 
measure  now  pending  In  Congress  and. 
set *<or  a vpte  on  -Dec.  ]4  i\wxt  ^ 


o 


^4 


u 

a.  f rfmJx A 


platform  had  been  submitted  to  the 
President  and  Mr.  Taft,  even  if  it  had 
not  been  actually  prepared  by  them. 
That  it  did  not  differ  greatly,  as  a 
whole,  from  the  platform  actually 
adopted  is  shown  by  a reproduction  in 
the  “Times”  of  June  19  of  the  pre- 


It  will  be  seen  the  original  draft 
referred  to  the  new  currency  law  as  a 
“temporary  enactment,”  but  this  was 
stricken  out,  as  were  also  the  following 
words:  “Only  until  there  can  be  es- 

tablished a permanent  currency  system 
that  will  avoid  all  emergencies.” 


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THE  BANKERS  MAGAZINE. 


Evidently,  if  the  President  and  Mr. 
Taft  were  responsible  for  the  original 
draft  of  the  platform,  declaring  the 
Aldrich- Vreeland  law  to  be  a tem- 
porary measure,  they  were  overruled  at 
Chicago  by  some  superior  authority. 

The  changes  referred  to  really  mean 
that  it  is  the  intention  of  those  who 
forced  the  Aid  rich- Vreeland  law 

through  to  make  it  permanent,  for  all 
the  declarations  of  the  currency  plank 
are  empty,  and  might  just  as  well  be  a 
part  of  the  Democratic  or  Populistic 
party  creed. 

In  stating  that  “the  appointment  of 
the  Monetary  Commission  by  the  pres- 
ent Congress  . . . insures  the 

early  realization  of  this  purpose”  (the 
development  of  a permanent  system, 
responding  to  our  greater  needs,  etc.) 
the  Republican  platform  affronts  every 
man  of  common  intelligence.  The 
Monetary  Commission,  with  two  ex- 


ceptions— Mr.  Burton  and  Mr. 

Weeks — is  made  up  of  men  from 
whom  nothing  sound  or  sensible  in  the 
way  of  currency  reform  may  be  ex- 
pected. 

Another  significant  change  was  made 
in  striking  out  the  provision  that  every 
dollar  shall  be  redeemable  in  gold. 
This  is  a direct  concession  to  unsound- 
ness. It  is,  raoveover,  a display  of 
ignorance,  for  already  every  dollar  is 
redeemable  in  gold,  either  by  law  or 
by  Treasury  precedents. 

The  Republican  currency  plank  is 
weak  and  unsound.  Apparently  its 
worst  features  were  dictated  by  those 
who  are  chiefly  responsible  for  the 
Aldrich- Vreeland  currency  law.  It  by 
no  means  follows,  however,  that  Mr. 
Taft  need  be  bound  by  this  declara- 
tion. He  is  great  enough  and  strong 
enough  to  make  a platform  of  his  own. 


THE  BANKS  OF  BUENOS  AIRES. 

THROUGH  the  courtesy  of  Mr.  C.  A.  Tornquist,  The  Bankers  Magazine  is  enabled 
to  present  herewith  statistics,  showing  the  condition  of  the  banks  of  Buenos  Aires, 
Argentine  Republic,  on  February  25  last  (a  nounts  stated  in  United  States  currency). 


Percent-  Dlvi- 
Deposits  Gash  age  of  dends 

in  U.  S.  re-  cash  to  per 

dollars  serve  deposits  cent. 


Surplus  and 

BANCO  capital 

paid  up 

Anglo  Sud  Americano $6,500,000 

Aleman  Transatlantic©  6.000.000 

Britanico  de  la  America  del  Sud 4,500,000 

Credlto  Argentlno  5,000,000 

Espanel  del  Rio  de  la  Plata  10,000,000 

Frances  del  Rio  de  la  Plata  3, 000.000 

Galicia  y Buenor  Aires  2,500,000 

Germanlco  de  la  America  del  Sud....  5,000,000 

Habilitador  

Italia  y Rio  de  la  Plata  3,000.000 

Londres  y Brasil  6,000, 000 

Londres  y Rio  de  la  Plata  10,000,000 

Naclon  Argentina  (Central  Nat.  Bk.)  35,000.000 
Property  of  the  Arg.  government. 

Nuevo  Italiano  1,500,000 

Popular  Argentlno  2,200,000 

Popular  Italiano  400,000 

Provincia  de  Buenos  Aires  10.000,000 


Total  $100,000,000 

Loans  $345,000,000. 


$4,716,626 

$2,397,165 

50.82 

6 

13,402.885 

5,271,108 

39.32 

8 

16,460.017 

6,012,835 

36.53 

9 

1,097,036 

402,488 

36.69 

10 

61,714.304 

14,434,940 

27,91 

12 

24,924,565 

9,730.209 

39.04 

9 

1,542,417 

500,984 

32.48 

. . 

1,924,261 

2,245,668 

116.70 

. , 

33.308 

32,965 

98.97 

32,440.000 

6,493,262 

20.02 

7 

4.102.208 

2,058,318 

60.18 

12* 

61,551,989 

28,060,766 

45.59 

20 

profits 

92,293,387 

42,808,139 

46.38 

incr’se 

capital 

10,115,910 

1,825,150 

18.04 

10 

3.746,571 

1,793.863 

47.88 

10 

767,539 

143,206 

18.66 

. . 

25.558.148 

6.084.319 

23.80 

8 

$346,391,171 

$130,295,375 

37.61 

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THE  BANK  OF  FRANCE, 


Importance  of  the  Note  Circulation.— The  Policy  of  a Uniform  Discount  Rate 
and  the  Protection  of  the  Gold  Reserve. 

By  Charles  A.  Conant. 


'T'HE  function  of  note  issue  is  im- 
A portant  in  France  because  of  the 
large  part  which  notes  play  as  a me- 
dium of  exchange  in  comparison  with 
checks  and  other  instruments  of  credit. 
There  is  nominally  a fixed  limit  to  the 
amount  of  the  circulation  of  the  Bank 
of  France,  but  practically  this  limit 
has  always  been  raised  by  a change  of 
law  when  it  has  become  apparent  that 
the  business  of  the  country  has  grown 
up  to  the  limit. 

The  limit  was  first  fixed  during  the 
Franco- Prussian  War  as  a necessary 
condition  of  the  suspension  of  gold 
payments,  but  when  the  government 
proposed  the  removal  of  the  limit  in 
1884,  it  was  fixed  by  the  Chambers  at 

8.500.000. 000  francs  ($700,000,000) . 
Another  extension  of  the  legal  limit 
was  made  by  the  law  of  January  25, 
1893,  to  $4,000,000,000  francs  and  it 
was  found  necessary  In  the  extension 
of  the  charter  in  1897  to  advance  the 
limit  to  5,000,000,000  francs  and  again 
by  a law  of  February  9,  1906,  to 

5.800.000. 000  francs.1 

The  Bank  of  France  faced  a serious 
problem  at  the  close  of  the  nineteenth 
century  in  the  struggle  over  the  re- 
newal of  its  charter.  The  renewal  was 
proposed  in  1891,  but  the  opposition 
was  so  strong  in  the  Chambers  that  the 
bill  for  the  purpose  was  withdrawn  by 
the  ministry  for  fear  of  defeat.  The 
bank  then  pursued  a Fabian  policy, 
awaiting  the  near  approach  of  the  ex- 
piration of  the  charter  at  the  close  of 
1897  in  the  apparent  belief  that  oppo- 
sition would  be  silenced  in  a measure 
by  the  lack  of  time  for  framing  a 
workable  project  for  a new  institution. 
The  new  charter  was  laid  before  the 


Chamber  of  Deputies  on  October  31, 

1896,  and  was  referred  to  a committee 
of  twenty-two  for  examination.  This 
committee  did  not  report  until  winter 
and  their  report  was  not  taken  up  for 
consideration  in  the  Chamber  until 
May  15,  1897.  The  bill  passed  the 
Chamber  on  July  1,  by  a vote  of  419 
to  97, 2 and  went  to  the  Senate,  where 
it  was  passed  at  the  October  session 
and  became  a law  on  November  17, 

1897.  The  vote  upon  the  passage  of 
the  bill  in  the  Chamber  of  Deputies 
did  not  indicate  the  full  strength  of 
the  opposition  to  the  charter.  The 
proposition  to  convert  the  bank  into  a 
state  institution  was  rejected  by  a vote 
of  118  to  422,  but  the  proposition  that 
the  bank  should  provide  capital  for  an 
agricultural  bank  to  the  amount  of 

60,000,000  francs  was  rejected  only  by 
a vote  of  287  against  258. 

The  new  charter,  which  was  not 
greatly  changed  from  the  form  in 
which  it  was  submitted  by  the  Govern- 
ment, extended  the  privileges  of  the 
bank  until  December  31,  1920,  sub- 
ject to  the  power  of  termination  by 
the  Chambers  on  December  31,  1912, 
if  they  should  see  fit  to  so  vote  during 
the  year  1911.  The  latter  limitation 
was  added  by  the  Committee  of  the 
Chamber  of  Deputies  which  considered 
the  government  plan.  The  essential 
features  of  the  old  charter  were  not 
changed,  but  the  limit  of  circulation 
was  increased  to  5,000,000,000  francs, 
the  bank  renounced  interest  upon  two 
existing  loans  to  the  Government 
amounting  to  140,000,000  francs,  and 
made  a further  advance  to  the  Govern- 
ment of  40,000,000  francs  free  of  in- 
terest. These  renunciations  of  interest 


1 Bulletin  de  Statistique,  February,  1906, 
LEX.  119. 


2 L’Economlste 
XII.  15. 


Europeen,  July  2,  1S97, 


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14 


THE  BANKERS  MAGAZINE. 


are  largely  offset  by  the  fact  that  the 
Government  carries  in  its  current  ac- 
count at  the  bank  a sum  which  is 
usually  equal  to  the  amount  of  these 
loans.  The  bank  was  required  to 
create  at  least  one  new  auxiliary 
bureau  each  year  up  to  the  number  of 
fifteen.  The  most  important  of  the 
new  obligations  imposed  upon  the 
bank  was  the  payment  of  a tax  equal 
to  one-eighth  of  the  rate  of  discount 
upon  that  portion  of  the  circulation 
which  exceeds  the  metallic  reserve. 
This  tax  is  never  to  be  less  than 
2,000,000  francs,  ($400,000)  per 
year.8 

The  Bank  of  France  enjoys  the  ad- 
vantage of  an  ownership  and  credit  in- 
dependent of  that  of  the  Government, 
in  spite  of  the  close  official  supervision 
which  is  exercised  over  it.  This  finan- 
cial independence  proved  as  useful  to 
the  country  midst  national  disasters 
and  changes  of  government  in  1870-71 
as  dependence  upon  the  government 
proved  dangerous  during  the  similar 
changes  of  1814-15.  The  bank  was 
able  to  assist  the  government  by  ad- 
vances when  its  own  arms  were  para- 
lyzed.3 4 None  of  the  182,500,00  francs 
of  the  bank  capital  are  owned  by  the 
State,  but  the  government,  since  1806 
has  had  a share  in  the  management 
through  the  appointment  of  the  gov- 
ernor and  two  deputy  governors,  re- 
movable at  the  will  of  the  Minister  of 
Finance.  The  bank  receives  the  public 
moneys  on  deposit  and  performs  other 
public  services  free  of  charge,  but  does 
not  act  as  an  agent  of  the  State  to  the 
same  extent  as  many  other  European 
banks.  By  the  charter  of  1897,  the 
duty  was  imposed  upon  the  bank  of 
paying  coupons  of  the  public  debt  and 
issuing  new  loans.5 

The  governing  board  of  the  bank  is 
a general  council,  which  consists  of 


3 Bulletin  de  Statlstlque,  December,  1897, 
XLJL  682. 

4 Noel,  I.,  240.  M.  Thiers  summed  up  one 

of  the  lessons  of  sound  banking  in  a sent- 
ence: “The  bank  saved  us  because  it  was 

not  a bank  of  state.” 

5 Pommier,  329. 


fifteen  regents  and  three  inspectors  or 
auditors  ( censeurs ).  The  members  are 
elected  at  a general  meeting  of  the 
stockholders,  but  three  of  the  regents 
must  be  selected  from  the  treasury  dis- 
bursing agents,  and  three  inspectors  and 
five  regents  must  be  chosen  from  among 
the  business  portion  of  the  sharehold- 
ers.6 The  only  shareholders  entitled 
to  participate  in  the  annual  meetings  in 
January  are  the  two  hundred  wno  hold 
the  largest  number  of  shares,  and  at 
the  present  value  of  the  shares  no 
shareholder  worth  much  less  than 
500,000  francs  ($100,000)  is  able  to 
participate.  A full  statement  of  opera- 
tions is  furnished  by  the  bank  to  the 
government  every  six  months  and  a 
balance  sheet  is  published  in  the  official 
journal  every  Friday. 

The  governor  and  deputy  governors 
of  the  bank  are  the  direct  representa- 
tives of  the  state  and  most  of  the  meas- 
ures taken  by  the  bank  are  taken  on 
their  initiative.  It  is  from  them  that 
proposals  usually  come  for  raising  or 
lowering  the  rate  of  interest.  It  was 
declared  by  M.  Rouland,  who  was  gov- 
ernor at  the  time  of  the  official  inquiry 
of  1865,  that  “nothing  of  any  descrip- 
tion which  concerns  the  great  interest 
of  the  public,  nothing  which  concerns 
the  larger  duties  which  the  bank  has  to 
perform  towards  commerce  and  in- 
dustry,— nothing  of  all  that  class  of 
business  is  left  to  the  discretion  of 
what  is  called  the  interested  party/' 
He  intimated  that  it  had  not  perhaps 
happened  twice  in  sixty-two  years  that 
the  proposal  to  change  the  rate  of  dis- 
count had  come  from  the  council.7  The 
bank  has  had  only  thirteen  governors 


6 Lois  et  Statuts,  Art.  9,  loi  du  22  Avrll, 
1806. 

7 Palgrave,  147.  It  is  declared  by  Fachan 
that  this  mixed  system  gives  satisfaction 
both  to  those  who  wish  to  withdraw  from 
the  manipulations  of  the  state,  the  accumu- 
lated resources  of  a private  bank,  consti- 
tuting Individual  property,  and  those  who 
believe  that  the  right  to  «issue  notes  is  so 
dangerous  that  the  manner  of  its  use  and 
the  prevention  of  abuses  of  it  should  be 
under  state  regulation. — Hlstorlque  de  la 
Rente  Francaise,  269. 


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THE  BANK  OF  FRANCE. 


15 


since  1806  and  several  served  only 
ad  interim . 

The  most  important  functions  of  the 
Bank  of  France  concern  the  issue  of 
bank-notes.  This  is  plain  from  the  fact 
that  of  its  liabilities  of  5,845,717,900 
francs  at  the  close  of  1907,  the  sum  of 
4,800,581,450  francs  represented  out- 
standing notes,  while  on  the  other  side 
of  the  account  the  assets  included  coin 
and  bullion  to  the  amount  of  3,615,- 
349,735  francs.  Commercial  paper 
represented  only  1,215,993,509  francs, 
at  Paris  and  all  branches,  and  ad- 
vances on  securities  577,867,415  francs. 
Private  deposit  accounts  represented  at 
Paris  426,298,229  francs  and  at 
branches  62,677,837  francs.  To  a 
very  large  extent  the  function  of  the 
bank  is  that  of  rediscount.  It  per- 
forms this  function  even  for  paper 
representing  very  small  transactions 
and  has  in  this  direction  done  much  to 
benefit  small  producers  and  shop- 
keepers. Thus,  during  1907  the  num- 
ber of  pieces  discounted  by  the  bank 
was  7,503,127  and  of  these  3,646,229 
were  for  100  francs  ($19-30)  or  less. 
The  number  of  pieces  of  these  low 
amounts  was  1,160,495  in  1881; 
1,590,839  in  1885;  and  2,188,957  in 
1804.  The  average  value  of  paper 
discounted  in  1907  was  732  francs  and 
the  average  time  before  maturity  26.06 
days.8 * 

The  discount  policy  of  the  Bank  of 
France  has  been  as  conservative  as  its 
administrative  policy.  While  the  aver- 
age rate  has  been  very  close  to  that  of 
the  Bank  of  England,  or  about  3.60 
per  cent,  from  1814  to  1900,  the 
changes  have  been  much  less  frequent 
and  advances  in  the  rate  have  been 
much  less  radical  in  periods  of  strin- 
gency. During  the  period  from  1844 
to  1900,  the  Bank  of  England  altered 
its  rate  400  times;  the  Bank  of  France 
altered  its  rate  111  times.  Nor  has 
the  tendency  of  recent  years  been  less 
favorable  to  the  conservatism  of  the 
French  bank.  From  1890  to  1900  in- 
clusive, the  changes  at  the  English  in- 


8 Assemble e Generate  dee  Actionnalres, 

1908,  18. 


stitution  were  66;  at  the  French,  9-® 
During  the  earlier  years  of  the  history 
of  the  French  bank,  from  January  13, 
1820,  to  January  14,  1847,  the  rate 
was  kept  uniformly  at  four  per  cent. 
In  more  recent  years,  the  rates  fixed 
on  May  19,  1892, — two  and  a half  per 
cent,  for  commercial  discounts  and 
three  and  a half  per  cent,  for  advances 
on  securities — remained  for  nearly 
three  years  unchanged,  when  they  were 
reduced  on  March  14,  1895,  to  two  and 
three  per  cent.  There  were  changes 
resulting  from  the  South  African  War 
in  1898,  which  carried  the  rate  for  dis- 
counts as  high  as  four  and  a half  per 
cent,  for  very  brief  intervals  in  1899 
and  1900;  but  on  May  25,  1900,  the 
rate  for  discounts  was  fixed  at  three 
per  cent  and  for  advances  at  three  and 
a half  per  cent.  These  rates  remained 
unchanged  for  nearly  seven  years,  until 
the  growing  pressure  for  capital  at  the 
beginning  of  1907  led  to  an  increase. 
The  rate  was  fixed  on  January  17, 
1907,  at  three  and  a half  per  cent.;  on 
March  21,  at  three  per  cent.;  and  on 
November  7,  at  four  per  cent.,  while 
at  London  it  stood  at  seven  per  cent, 
and  at  Berlin  at  seven  and  a half. 
With  the  passing  of  the  storm,  the  rate 
went  down  on  January  9,  1908,  to 
three  and  a half  per  cent.,  and  on  Jan- 
uary 23d  to  three  per  cent.10 

The  comparative  uniformity  of  the 
discount  rate  at  the  Bank  of  France 
has  been  the  result  of  three  factors, — 
the  magnitude  of  the  metallic  reserve; 
the  less  variable  demands  upon  the 
bank  than  those  which  fall  upon  the 
Bank  of  England;  and  definite  adher- 
ence to  a different  policy  of  maintain- 
ing the  reserve. 

A large  reserve  has  made  the  Bank 
of  France  less  sensitive  than  it  might 
otherwise  have  been  to  temporary  de- 
mands for  gold.  Since  the  suspension 
of  silver  coinage  on  private  account  the 
gold  hoard  of  the  bank  has,  with  few 
interruptions,  steadily  grown  until  it 
was  for  a time  the  largest  accumulation 


9 Palgrave,  151. 

10  Assemblee  Generate  des  Actionnalres, 
1908,  9. 


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16 


THE  BANKERS  MAGAZINE. 


of  gold  in  the  world.  The  outpour  of 
the  yellow  metal  from  the  mines  of 
South  Africa  accelerated  the  upward 
movement,  in  spite  of  the  large  de- 
mands made  by  Russia  and  the  United 
States.  By  the  close  of  1902  the  gold 
in  the  bank  stood  at  2,542,700,000 
francs,  which  was  an  increase  of  fully 
fifty  per  cent,  over  the  amount  ten 
years  before.  This  amount  was  con- 
siderably increased  in  the  following 
years,  in  spite  of  the  monetary  pressure 
of  1907.  For  a time  the  accumulation 
of  silver  was  in  excess  of  requirements, 
but  after  1892  there  was  a gradual  de- 
cline in  the  volume  of  the  white  metal, 
which  in  fifteen  years  reduced  the 
amount  by  about  twenty-five  per 
cent.11 

While  the  metallic  reserve  of  the 
Bank  of  France  sustains  a large  vol- 
ume of  outstanding  notes,  and  the 
bank  stands  ready  to  rediscount  paper 
for  joint  stock  banks,  there  are  fewer 
and  smaller  sudden  demands  for  money 
than  in  London.  Foreign  trade,  the 
demand  for  exchange,  and  the  invest- 
ment of  capital  abroad  play  a smaller 
part  than  on  the  London  market.12  At 
the  close  of  1907  deposits  and  creditor 
current  accounts  in  the  five  principal 
French  stock  banks  were  about  3,500,- 
000,000  francs  ($700,000,000)  and 
reserves  in  currency  or  on  deposit  in 
other  banks  were  830,000,000  francs 
($66,000,000).  The  corresponding  fig- 
ures for  English  joint  stock  banks 
were  deposits  of  $4,200,000,000  and 
cash  resources  of  $850,000,000.  Obvi- 
ously, to  meet  possible  demands  of 
such  magnitude  it  is  essential  for  the 
Bank  of  England  to  take  resolute 
action  when  its  reserve  is  threatened. 


11  M.  Pallaln,  the  governor  of  the  bank, 
points  out  that  the  diminution  of  the  re- 
serve which  took  place  during  the  trying 
period  of  1907  was  wholly  in  silver  and 
arose  “from  the  demands  of  the  colonies  or 
from  our  allies  in  the  Latin  Union,  of  whom 
we  have  every  interest  in  facilitating  their 
re-stocking.”  Of  the  400,000,000  francs  lost 
since  1892,  he  computed  that  half  had  gone 
since  1904. — Assemblee  Generale  des  Aetion- 
naires,  1908,  15. 

12  Palgnave,  149. 


The  English  institution,  moreover, 
lacks  the  power  to  meet  emergencies  by 
the  issue  of  its  notes,  which  is  one  of 
the  chief  resources  of  the  Bank  of 
France.  It  is  the  knowledge  that  this 
power  of  note  issue  can  be  availed  of 
for  making  rediscounts,  practically 
without  limit,  which  enables  the  joint 
stock  banks  of  France  to  do  business 
in  safety  with  slender  cash  reserves. 
The  largest  of  these  institutions  is  the 
Credit  Lyonnais,  with  deposits  at  the 
close  of  1907  amounting  to  1,542,800,- 
000  francs  ($298,000,000).  The  other 
two  of  chief  importance  are  the  Societe 
Generale  and  Comptoir  Nationale 
d’Escompte,  each  with  deposit  obliga- 
tions of  over  800,000,000  francs.13 

Apart  from  these  differences  in  its 
position,  however,  the  Bank  of  France 
has  for  many  years  pursued  deliberately 
the  policy  of  protecting  its  reserve  un- 
der certain  conditions  by  buying  gold 
at  a loss  rather  than  by  imposing  upon 
commerce  the  burden  of  an  increase  in 
the  discount  rate.  It  is  recognized 
that  this  method  is  not  efficient  in  an 
economic  crisis,  because  it  does  not  op- 
erate upon  the  whole  commercial 
structure  to  restrict  loans  and  specula- 
tion and  to  attract  capital  from  abroad. 
There  are  occasions  on  which  the 
French  method  may  properly  be  used, 
however,  as  when  credit  is  not  unduly 
expanded  and  where  a demand  for  gold 
has  arisen  from  special  and  recogniz- 
able causes.  While  this  method  of 
protecting  the  gold  reserve  was  at  first 
condemned  by  economists,  and  while 
their  censure  was  well  founded  so  far 
as  it  applied  to  its  use  to  counteract 
the  drain  of  a crisis  and  to  redress  the 
balance  of  the  foreign  exchanges,  it 
has  come  to  be  recognized  in  recent 
years  that  it  may  be  combined  in  a cau- 
tious manner  with  the  English  method 
of  advancing  the  discount  rate,  with 
benefits  to  legitimate  business.  The 
choice  of  either  method,  or  the  prudent 
use  of  both  methods  in  conjunction 
with  each  other,  depend  largely  upon 


13  Vide  L’Economiste  Europeen,  March  6, 
1908,  XXXIII.  295. 


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THE  BANK  OF  FRANCE. 


17 


the  ability  of  bankers  to  judge  whether 
the  drastic  pressure  of  sharp  advances 
in  the  discount  rate  is  required  in  or- 
der to  arrest  the  expansion  of  credit 
and  check  dangerous  speculation. 

While  the  project  of  direct  profit- 
sharing  is  not  enforced  so  avowedly  by 
the  government  upon  the  Bank  of 
France  as  upon  some  other  European 
banks,  the  Treasury  receives  a liberal 
proportion  of  the  earnings  of  the  bank. 
By  various  forms  of  taxation  the  gov- 
ernment in  1907  collected  thirteen  per 
cent,  of  gross  earnings  and  more  than 
twenty-three  per  cent,  of  net  earnings. 
The  total  amount  thus  absorbed  was 
11,082,218  francs  ($2,140,000)  of 
which  about  7,357,141  francs  ($1,- 
420,000)  came  under  the  head  of  the 
return  to  the  State  as  fixed  by  the 
charter  of  1897.  Up  to  that  time  an 
annual  tax  had  been  paid  of  2,500,000 
francs.  The  new  law  provided  that  the 
government  should  receive  one-eighth 
of  the  rate  of  discount  upon  the  pro- 
ductive operations  of  the  bank,  but  in 
no  case  less  than  2,000,000  francs  per 
year.  The  productive  operations  were 
based  upon  the  difference  between  the 
metallic  reserve  and  total  operations.14 
Another  provision  of  the  charter  of 
1897  provided  that  profits  arising  from 
a discount  rate  above  five  per  cent, 
should  be  covered  to  the  proportion  of 
three-fourths  into  the  public  Treasury. 
The  effect  of  this  provision  was  to  dis- 
courage the  advance  of  the  discount 
rate  as  a means  of  retaining  gold.  It 
did  not  become  operative,  however,  un- 
til 1907,  when  certain  special  discounts 
of  English  paper  were  consented  to  at 
a rate  above  five  per  cent. 

The  number  of  branches  and  banking 
offices  of  the  Bank  of  France  has  been 
increased  from  time  to  time,  until  the 
total  number  at  the  close  of  1907  was 


14  Calculations  summed  up  by  Pommier 
showed  that  from  1874  to  1896  the  new  plan 
would  have  yielded  the  government  about 
87,000,000  francs  more  than  the  old,  even 
though  In  certain  years  the  return  would 
have  fallen  below  2,500,000  francs. — La 
Banque  de  France  et  l’Etat,  402-3.  The 
total  payments  under  the  new  provision  to 
the  close  of  1907  were  60,133,551  francs. 

2 


467.  The  number  in  1894  was  249. 
The  number  of  employees,  which  at 
Paris  was  1074  in  1894,  rose  in  1907 
to  1300,  while  at  the  branches  the  in- 
crease was  from  1258  to  1636.  The 
dividends  paid  in  1907  were  175 
francs  per  share,  to  29,485  separate 
shareholders. 


PENNSYLVANIA  DIVIDEND. 

THE  regular  semi-annual  dividend  of  the 
Pennsylvania  Railroad  Company  was 
mailed  on  May  28  to  59,415  share- 
holders, the  greatest  number  in  the  com- 
pany’s history,  and  representing  an  in- 
crease of  14,000  over  the  number  receiving 
the  dividend  one  year  age. 

The  nearly  60,000  separate  checks  sent 
out  amounted  ill  value  to  $9,437,839.50,  this 
being  a dividend  of  three  per  cent,  on  the 
capitalization  of  $314,594,650,  divided  into 
6,291,893  shares  of  $50  par  value.  The 
average  holdings  amounted  to  only  105 
shares,  a decrease  for  the  last  year  of 
thirty-two. 

Of  exceptional  interest  is  the  increase 
in  the  number  of  women  shareholders  from 
the  21,028  of  one  year  ago,  to  27,767.  Wo- 
men thus  receive  more  than  forty-six  per 
cent,  of  the  total  number  of  dividend  checks 
sent  out. 

There  are  17,988  shareholders  of  the 
Pennsylvania  Railroad  in  the  state  of 
Pennsylvania — 30.13  per  cent,  of  the  total— 
an  increase  during  the  past  six  months  alone 
of  just  3,000.  During  this  same  period  the 
number  of  shareholders  m New  York  State 
has  increased  by  1,259  to  a present  total 
of  8,903.  The  average  ownership  in  the 
state  of  Pennsylvania  is  eighty-eight  shares, 
while  in  New  York  state  each  stockholder 
owns  an  average  of  207  shares. 

On  October  1,  1907,  there  were  8,536 
shareholders  of  the  Pennsylvania  Railroad 
in  Europe.  On  May  28  there  were  mailed, 
on  the  company’s  behalf  in  London,  checks 
for  9,591  individual  stockholders  owning  an 
average  of  129  shares.  New  England  share- 
holders get  13,681  of  the  dividend  checks 
sent,  investors  in  that  section  owning  an 
average  of  seventy-one  shares. 

Including  the  dividend  mailed  on  May  28, 
the  Pennsylvania  Railroad  has,  during  the 
past  nine  and  a half  years  paid  to  its  share- 
holders in  dividends  the  sum  of  $140,552,476. 
During  that  period,  that  is  since  January  1, 
1899,  the  number  of  partners  in  this  com- 
pany, persons  depending  for  a whole  or  a 
portion  of  their  income  upon  the  earnings 
of  this  corporation,  has  increased  from  23,- 
720  to  59,415— an  increase  in  ten  years  of 
35,695  shareholders. 


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TEMPORARY  LOANS 


HE’D  SAVED  THE  COUPONS. 

“Father  seems  impressed  with  your  talk 
about  coupons,”  said  the  maiden.  “Have 
you  really  any?”  “Sure,”  answered  the 
guileful  youth.  “Got  500  saved  up  toward 
a piano  for  our  little  flat.” — Louisville 
Courier-J  oumal. 


CASH  IN  ADVANCE. 

“I  pay  as  I go,”  declared  the  pompous 
citizen.  “Not  while  I am  running  these 
apartments,”  declared  the  janitor.  “You’ll 
pay  as  you  move  in.” — Pittsburg  Post. 


STARTING  THE  PANIC. 

“Have  you  ever  been  through  a money 
panic?” 

“One.” 

“What  started  it?” 

“I  told  my  wife  I couldn’t  afford  to  buy 
her  a Merry  Widow.” — Exchange . 


DEFINITION  OF  A FINANCIER. 

A financier  is  a man  who  spends  the  first 
half  of  his  life  trying  to  get  money,  and  the 
second  half  trying  to  give  it  away. — Boston 
News  Bureau. 


AN  IMPORTANT  DISTINCTION. 

She  (indignantly) — “Why  did  you  fail 
to  keep  your  appointment  with  me  yester- 
day?” 

He — “I’m  awfully  sorry,  but  I was  com- 
pelled to  wait  in  a restaurant  until  it  was 
too  late.” 

She  (icily) — “Pardon  me,  but  I thought 
you  had  a position  in  a bank.  I wasn’t 
aware  that  you  were  a waiter.” — Chicago 
Daily  News. 


TRUST  BUSTER  FOILED  AT  LAST. 

“Well,  I see  that  there  is  at  least  one 
trust  which  Roosevelt  las  not  succeeded 
in  busting.” 

“Which  one  is  that?'’ 

“The  In  God  We  Trust”— New  York 
Evening  Post. 


CONSERVATIVELY  TRUTHFUL. 

Employer — “Are  you  truthful?” 

Young  Applicant — “Yep;  but  I ain’t  so 
darn  truthful  as  to  spoil  your  business.” — 
Judge. 


A TASK  TO  STAGGER  HIM. 

If  Solomon  were  alive  could  he  draft  a 
popular  currency  bill? — Boston  Journal. 


LINES  OF  A BANK  SLIP. 

Let  me  deposit  on  this  slip 
Every  day  my  little  bit. 

So  when  I pass  in  all  my  checks, 

St.  Peter  won’t  call,  “pass  on,  there; 
next!” 

— Detroit  Free  Press. 


DESTROYING  CONFIDENCE. 

Stockholders  of  Bank — “We  have  you 
dead  to  rights.  You  have  embezzled  more 
than  the  capital  stock  of  this  institution, 
and  we  will  prosecute  you  to  the  limit.” 
Bank  President — “But — er,  gentlemen  I 
Wonldn’t  that— er,  be  destroying  con- 
fidence?”— Chicago  Journal. 


CURE  FOR  A BAD  MEMORY. 


AN  UNNECESSARY  QUALIFICA- 
TION. 

The  bank  cashier  need  not  have  a good 
musical  ear  to  detect  a false  note. — PhUc i- 
delphia  Bulletin. 

18 


Koyne — “I  wish  I could  do  something 
to  improve  my  memory.  I am  dreadfully 
forgetful.” 

I.  M.  P.  Cunius — “Lend  me  ten  dollars.” — 
Washington  Heights  Town  Topics. 


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LESSONS  OF  THE  PANIC  OF  1907. 

Views  of  Prominent  Trust  Company  Officials. 

'D  EAL  test  of  the  strength  of  any  period  being  about  850,  as  against  over 
financial  institution  comes  when  1,500  in  1907.  During  the  fourteen 


unusual  demands  are  made  upon  it. 
The  tide  of  prosperity  carries  with  it 
craft  of  all  kinds,  strong  and  weak, 
which  float  with  ease  upon  the  calm 
surface  of  a stormless  sea:  but  when 
“the  rains  descend  and  the  winds 
Wow/'  when  the  gathering  storm  bursts 
with  full  fury,  the  weaker  ones  go 
down,  and  the  crafts  which  safely  ride 
the  tempest  are  those  built  and 
equipped  and  manned  for  both  foul 
weather  and  fair. 

To  the  observant  and  thoughtful 
man  a panic  offers  unusual  opportuni- 
ties for  the  study  of  the  strong  and  the 
weak  points  of  financial  institutions, 
for  the  adoption  of  those  principles 
and  practices  which  have  been  proved 
good  and  the  casting  away  of  those 
which  have  been  shown  to  be  elements 
of  weakness.  In  finance  as  well  as  in 
politics,  in  1908  as  well  as  in  the  days 
of  Patrick  Henry,  there  is  no  safer 
guide  than  the  “lamp  of  experience." 
Unfortunate  as  have  been  many  of  the 
effects  of  the  panic  of  1907,  this  much 
good  at  least  ought  to  result,  that  our 
banks  and  other  financial  institutions 
learn  how  to  become  better  and 
stronger  than  ever. 

For  the  trust  company,  special  in- 
terest attaches  to  the  recent  panic,  be- 
cause of  the  fact  that  it  was  the  first 
panic  that  has  occurred  since  the  trust 
company  became  an  important  factor 
in  the  financial  world.  The  real  de- 
velopment of  the  trust  company  had 
just  begun  at  the  time  of  the  panic  of 
1893,  the  number  of  companies  at  that 


years  the  aggregate  resources  of  these 
institutions  had  increased  from  about 
one  billion  dollars  in  1893  to  nearly 
four  and  a half  billion  dollars  in  1907. 

Opponents  of  the  trust  company  had 
freely  prophesied  that  the  institution 
would  not  survive  the  strain  of  a se- 
vere panic,  and  called  attention  to  the 
fact  that  the  great  development  which 
they  were  having  during  the  flush  times 
from  1898  on  came  during  a period 
when  everything  was  flourishing,  and 
hence  offered  no  indication  of  what  to 
expect  when  the  tide  turned. 

We  are  now  far  enough  away  from 
the  panic  of  1907  to  know  that  the 
forebodings  of  such  critics  were  not 
well-founded.  The  trust  company 
weathered  the  panic  quite  as  well  as 
any  other  financial  craft,  and  is  an- 
chored to-dav  in  as  safe  a harbor  and 
in  as  sea-going  a condition  as  any. 
Minute  comparisons  between  different 
kinds  of  financial  institutions  at  this 
time  would  be  useless,  and  the  truth  is 
that  all  classes  of  them  withstood  the 
exceedingly  severe  strain  as  well  as  any 
reasonable  man  could  expect  under  the 
conditions  which  they  had  to  face.  It 
is  safe  to  say  that  the  trust  company  as 
an  institution  made  an  enviable  record. 

Nevertheless,  it  would  be  idle  to 
claim  that  the  trust  company,  unlike  all 
other  human  institutions,  is  in  a state 
of  absolute  perfection.  There  must  be 
points  in  which  its  organization  and 
management  can  be  improved.  Some 
of  these  must  have  been  revealed  in  so 


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THE  BANKERS  MAGAZINE. 


severe  a strain  as  that  imposed  by  the 
panic  of  1907.  What  were  they? 

In  the  wish  to  get  expert  testimony 
on  this  question,  letters  were  written  to 
a number  of  prominent  trust  company 
officials  in  various  parts  of  the  coun- 
try, asking  for  their  views  on  the  ques- 
tion, “What  Lessons  for  the  Trust 
Company  Were  Revealed  in  the  Recent 
Panic  ?” 

Following  are  the  replies  received: 

John  H.  Holliday,  president  Union 
Trust  Co.,  Indianapolis,  Ind. : Speak- 

ing briefly,  the  lesson  for  trust  com- 
panies taught  by  the  panic  is  in  my 
opinion  the  advisability  of  doing  sound 
banking.  Do  not  trespass  on  the  field 
of  commercial  bahks ; maintain  ample 
reserves  with  a goodly  proportion  of 
cash;  avoid  speculative  promotions  and 
the  tying  up  of  funds  in  slow  loans  or 
unmarketable  securities;  do  not  try  to 
make  money  “hand  over  fist”  by  doubt- 
ful projects;  in  short,  “play  safe”  and 
be  content  with  reasonable  profits 
rather  than  risk  the  solvency  and 
standing  of  the  institution  in  the  hope 
of  grasping  inordinate  ones.  Security 
is  the  foundation  of  the  trust  com- 
pany's success.  A reputation  for  con- 
servatism will  be  the  greatest  asset  in 
the  long  run.  Even  with  the  utmost 
carefulness  and  good  judgment  some 
losses  will  occur,  but  this  does  njot 
justify  rushing  into  danger  because 
other  companies  have  taken  such  risks 
without  damage.  The  responsibility 
for  the  care  of  other  people's  money 
should  never  be  lost  sight  of,  and  the 
ability  to  pay  depositors  on  demand 
should  never  be  in  doubt. 

Festus  J.  Wade,  President  Mercan- 
tile Trust  Co.,  St.  Louis:  The  lessons 

from  the  panic  of  1907,  from  the  stand- 
point of  the  trust  company  official,  may 
be  briefly  summarized  as  follows: 

1.  Trust  companies  doing  a bank- 
ing business  should  be  in  the  clearing- 
house association  of  their  respective  lo- 
calities. 

2.  They  should  shorten  up  the  ma- 
turities of  the  paper  they  hold,  so  that 
when  a sudden  call  is  made,  their  as- 
sets will  be  easily  convertible. 


3.  Trust  companies  doing  a bank- 
ing business  should  carry  the  same  cash 
reserve  as  state  or  national  banks  of 
their  respective  localities. 

4.  Trust  companies  doing  a com- 
bination trust  and  banking  business 
should  avoid  investing  their  money,  or 
the  money  of  their  depositors,  in  pro- 
motion schemes,  no  matter  how  profit- 
able they  may  be. 

E.  D.  Hulbeut,  vice-president  Mer- 
chants' Loan  and  Trust  Co.,  Chicago: 
In  considering  the  question  proposed, 
it  should  be  borne  in  mind  that  there 
are  several  different  kinds  of  trust  com- 
panies. To  differentiate  broadly,  they 
are:  first,  the  company  that  confines 
itself  exclusively  to  fiduciary  business 
and  receives  no  deposits  except  in  that 
capacity;  second,  the  company  that,  in 
addition  to  its  strictly  trust  business, 
receives  savings  deposits  and,  in  many 
cases,  carries  on  a commercial  banking 
business  as  well;  and  third,  the  com- 
pany which,  in  addition  to  all  these 
things,  does  what  is  commonly  known 
as  “promoting”  or  “financing.”  This, 
in  its  mildest  form,  consists  in  loaning 
money  to  carry  on  construction  work, 
with  the  expectation  of  being  repaid 
when  the  work  is  completed,  through 
the  sdle  of  bonds  or  other  securities. 
Also  the  underwriting  of  bonds  on  com- 
pleted property,  trusting  to  the  sale  of 
the  bonds  for  repayment. 

The  companies  which  confine  them- 
selves strictly  to  fiduciary  work  and  re- 
ceive no  deposits  may  be  left  out  of 
consideration. 

Those  which  receive  commercial  and 
savings  deposits  should,  and  generally 
are,  placing  that  part  of  their  busi- 
ness under  the  same  regulations,  re- 
garding the  character  of  their  loans 
and  investments  and  the  carrying  of 
cash  reserves,  as  prevail  with  well  man- 
aged banks  doing  a purely  savings  or 
commercial  business. 

Those  which  have  been  undertaking 
so-called  financing  and  promoting  in 
connection  with  a deposit  business  will, 
it  is  to  be  hoped,  abandon  that  part  of 
their  business  entirely. 

It  is  difficult  to  understand  why  any 


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TRUST  COMPANIES. 


21 


trust  companies  have  assumed  that 
they  could  invest  their  deposits  safely 
in  ways  that  would  be  considered  im- 
proper for  commercial  banks,  or  that 
they  could  properly  protect  those  de- 
posits with  reserves  that  would  be  in- 
adequate for  other  banks. 

It  can  hardly  be  questioned  that  the 
trust  companies  which  have  persisted 
in  these  practices  have  been  a source 
of  weakness  to  our  financial  system, 
and  there  are  many  thoughtful  men 
who  believe  that  if  all  banks  and  trust 
companies  receiving  deposits  of  other 
banks  had  been  required  to  keep  pro- 
per cash  reserves,  the  crisis  of  last  fall 
would  have  been  passed  without  any 
suspension  of  currency  payments  and 
we  would  not  now  be  subjected  to  the 
danger  of  hasty  currency  legislation. 

In  short,  I believe  the  lessons  the 
trust  companies  are  to  learn  from  the 
so-called  panic  of  last  fall  are  the  sim- 
ple, homely  lessons  that  all  panics 
teach;  namely,  that  it  is  not  safe  to 
depart  from  the  fundamental  princi- 
ples of  sound  finance. 

The  success  of  trust  companies  has 
been  so  great  in  handling  all  branches 
of  legitimate  banking  that  it  is  safe 
to  assume  the  correction  of  the  evils 
above  referred  to  will  entrench  them 
more  strongly  than  ever  in  popular 
favor. 

F.  B.  Gibson,  president  Colorado 
Bankers’  Association : The  phenom- 

enal success  of  trust  companies  has  in- 
clined them  to  go  beyond  their  original 
scope,  and  to  encroach  upon  the  do- 
main of  both  the  commercial  and  the 
investment  banker.  The  trying  experi- 
ence of  the  fall  of  1907  has  called  a 
halt  on  this  tendency.  It  has  shown: 

First,  that  trust  companies  are  not 
independent  of  the  national  banks. 
They  should  have  such  harmonious  re- 
lations as  will  insure  active  and  instant 
co-operation  in  time  of  stress.  Such 
relations  can  best  be  permanently  as- 
sured by  the  trust  companies  leaving 
commercial  loans  and  deposits  for  the 
national  banks,  and  by  their  allowing 
only  such  interest  rates  on  deposits  as 


their  clearing-house  associates  will 
deem  fair. 

Second,  the  trust  company  being 
under  no  obligation  to  loan  to  its  own 
customers,  is  free  to  select  the  most 
profitable  employment  offered  for  its 
funds.  Herein  lies  the  temptation  to 
engage  in  promotions  and  speculative 
investments,  the  evils  of  which  recent 
experiences  have  fully  demonstrated. 
This  field  of  operation  should  be  left 
to  the  investment  and  private  bankers. 

Another  thought  not  prompted  espe- 
cially by  the  recent  disturbance,  but  of 
much  importance  to  trust  companies,  is 
this:  the  word  “trust”  should  be  safe- 
guarded by  statute  in  all  the  states. 
In  Colorado  its  use  is  restricted  to  cor- 
porations organized  under  the  trust 
company  law,  and  subject  to  supervi- 
sion by  the  State  Bank  Commissioner. 
This  protects  the  name  from  use  by 
promotion  concerns  and  loaning  com- 
panies, and  gives  it  the  same  dignity 
and  standing  as  the  word  “bank,”  thus 
increasing  the  public  confidence  in 
those  institutions  doing  a strictly  trust 
company  business. 

Lynn  H.  Dinkins,  president  Inter- 
state Trust  and  Banking  Co.,  New  Or- 
leans: It  appears  to  me  that,  taken  all 

in  all,  the  trust  company  has  no  spe- 
cial cause  for  anxiety  over  the  record 
made  by  it  during  the  past  seven 
months. 

The  necessity  for  a company  which 
accepts  demand  deposits  retaining  in 
its  own  vaults  a fair  percentage  of  cash 
reserve  was  already  known  to  every- 
body; the  value  of  such  a policy  has 
been,  perhaps,  accentuated. 

The  advantage  of  co-operation  be- 
tween companies  in  the  same  locality 
was  also  universally  recognized  before 
October,  1,907;  but,  in  our  section,  it 
is  now  availed  of  by  many  companies 
which  competition  heretofore  separated* 

It  may  be  possible  that  the  value  of 
having  a directory  fully  conversant 
with  loans,  investments,  etc.,  is  a 
new  lesson  to  some  companies;  but,  I 
think,  a majority  of  the  larger  com- 
panies have  utilized  their  directory  in 
this  way  for  the  past  several  years* 


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THE  BANKERS  MAGAZINE. 


We  have  found  that  in  order  to  obtain 
the  best  service  results  from  directors 
it  is  desirable  to  have  them  interested, 
to  a considerable  extent,  in  the  stock  of 
the  company.  It  may  be  this  is  a new 
lesson,  and  one  well  worthy  of  consid- 
eration. 

Benjamin  I.  Cohen,  president  Port- 
land Trust  Co.,  Portland,  Ore.:  The 

recent  panic  impressed  upon  my  mind 
the  fact  that  a well  organized  and 
properly  managed  trust  company  was 
about  the  safest  financial  institution 
known  to  modern  times.  The  record 
made  by  the  trust  companies  was,  I 
think,  superior  to  that  made  by  the  na- 
tional banks.  The  weaknesses  that 
were  developed  in  the  trust  companies 
that  got  into  difficulties  were  due,  in  a 
few  rare  instances,  to  dishonesty,  but 
principally  to  the  fact  that  the  com- 
panies alluded  to  were  managed  by 
visionaries  or  unscrupulous  men  who 
used  them  as  a medium  for  speculation, 
rather  than  as  legitimate  trust  com- 
panies, having  due  regard  to  the  sa- 
credness of  other  people's  property. 

Another  fruitful  source  of  trouble 
was  a desire  to  make  undue  profits;  in 
other  words,  looking  for  high-rate  in- 
vestments, rather  than  absolute  safety 
of  the  principal. 

I do  not  think  that  the  amount  of 
cash  reserve  that  any  given  trust  com- 
pany held  at  the  beginning  of  the  panic 
was  of  as  great  importance  as  the  man- 
ner in  which  their  investments  were 
made.  In  other  words,  if  a company 
had  a fair  cash  reserve,  then  had  a 
good  second  reserve  in  the  shape  of 
well  selected  bonds  or  commercial  pa- 
per of  the  highest  class,  and  if  the  re- 
mainder of  its  assets  were  safely  in- 
vested in  mortgages,  or  other  slow  but 
sure  paper,  the  company  was  bound  to 
pull  through  the  panic,  because  it  could 
realize  upon  its  quick  assets,  while  it 
was  negotiating  the  sale  of  its  slower 
ones,  like  mortgages. 

Oliver  C.  Fuller,  president  Wis- 
consin Trust  Co.,  Milwaukee,  Wis.: 
After  full  consideration  I have  come  to 
the  conclusion  that  I cannot  comply 
with  your  request  for  the  reason  that, 


in  my  opinion,  there  were  no  “lessons 
for  trust  companies"  revealed  in  the 
recent  panic  other  than  such  lessons  as 
were  applicable  to  every  class  of  bank- 
ing institution.  A possible  exception 
may  be  that  the  New  York  city  trust 
companies  were  shown  the  importance 
of  belonging  to  the  clearing-house  as- 
sociation or  of  having  an  organization 
of  their  own  for  mutual  protection  and 
co-operation  at  all  times  and  especially 
in  times  of  stress,  such  as  they  experi- 
enced in  October  and  November.  But 
this  lesson,  if  it  might  be  so  called,  was 
so  purely  local  in  its  application  that 
I deem  it  unnecessary,  if  not  unbecom- 
ing, for  a country  trust  company  offi- 
cial to  comment  upon  it. 

Notwithstanding  that  the  panic  re- 
vealed few,  if  any,  lessons  for  trust 
companies  alone,  it  seems  to  me  that 
the  aftermath  has  revealed  many  things 
distinctly  creditable  to  trust  companies 
as  a whole.  For  one  thing,  it  has  re- 
vealed that  the  prediction  heretofore 
frequently  made,  that  the  first  great 
panic  in  this  country  would  show  the 
trust  company  to  be  an  unseaworthy 
type  of  craft  and  unable  to  stand  a 
severe  storm,  was  founded  on  prejudice 
rather  than  on  fact.  Quite  to  the  con- 
trary, it  appears  that  the  trust  com- 
panies as  a class  stood  the  storm  quite 
as  well,  if  not  a little  better,  than  the 
banks,  and  that  after  the  storm  was 
over  they  righted  themselves,  trimmed 
ship,  and  were  ready  for  action  quite 
as  soon  as  any  other  type  of  financial 
vessel,  so  to  speak. 

C.  F.  Enright,  vice-president  Mis- 
souri Valley  Trust  Co.,  St.  Joseph, 
Missouri:  The  recent  panic,  in  my 

opinion,  revealed  the  fact  that  a strong 
reserve  is  absolutely  necessary  for 
every  trust  company,  with  a goodly 
portion  in  actual  cash  in  the  vaults. 
Trust  companies  should  not  originate 
schemes  or  undertakings,  but  should 
provide  facilities  for  carrying  out  only 
legitimate  enterprises  of  proven  char- 
acter. It  is  also  of  the  greatest  im- 
portance that  trust  companies  avoid  the 
appearance  of  connection  with  enter- 
prises of  hazardous  or  speculative  char- 


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TRUST  COMPANIES. 


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acter.  As  a man  is  judged  by  his 
public  and  private  conduct,  so  the 
character  of  a trust  company  is  regard- 
ed by  the  general  nature  of  its  busi- 
ness. 

Trust  companies  should  endeavor  to 
educate  their  customers  to  the  fact  that 
it  is  not  possible  to  pay  interest  on  all 
deposits  and  have  all  the  funds  on  hand 
at  all  times,  especially  that  part  of 
their  deposits  upon  which  they  agree 
to  pay  a rate  of  interest  in  excess  of 
two  per  cent,  per  annum.  It  would 
also  appear  that  there  is  a limit  of  rate 
at  which  banking  institutions,  like 
trust  companies,  can  safely  undertake 
to  receive  deposits,  and  that  when  they 
depart  from  the  usual  practices  and 
agree  to  pay  unusual  rates  for  deposits 
they  are  treading  on  unsafe  ground. 

There  are  many  lessons  that  have 
been  taught  by  the  recent  panic,  but 
after  considering  all  of  them  I can 
realize  none  of  more  importance  than 
the  first  given  by  me,  of  maintaining  at 
all  times  a strong  reserve  and  plenty 
of  actual  currency  on  hand,  which 
makes  an  institution  independent  to  an 
equal  degree  with  its  correspondents 
and  other  competitors  against  unfore- 
seen flurries,  which  always  come  with- 
out warning. 


SUMMARY  OF  VIEWS. 

General  Lessons. 

The  reader  will  not  fail  to  notice 
that  there  is  substantial  unanimity 
among  the  above  writers  in  the  opin- 
ions, first,  that  as  an  institution  the 
trust  company  has  held  pretty  firmly 
to  sound  financial  practices;  and,  sec- 
ond, that  a prominent  lesson  taught  to 
the  few  companies  which  needed  it  was 
the  danger  of  being  connected  in  any 
manner  with  promotions  or  speculative 
enterprises  and  of  being  over-anxious 
to  make  big  profits.  While  a number 
of  specific  lessons  are  named  in  the  let- 
ters, non-observance  of  these  lessons 
would  ordinarily  be  attributable  to  a 
willingness  to  take  great  risks  for  pos- 
sible large  profits  rather  than  to  igno- 
rance of  the  principles  involved.  In 


short,  the  most  essential  lessons  to  be 
learned  are,  as  Mr.  Holliday  puts  it, 
“The  advisability  of  doing  sound  bank- 
ing”; or,  to  quote  Mr.  Hulbert,  “The 
simple,  homely  lessons  that  all  panics 
teach;  namely,  that  it  is  not  safe  to  de- 
part from  the  fundamental  principles 
of  sound  finance.” 

Assuming,  as  we  safely  may,  that 
there  are  few  trust  company  officials 
who  do  not  know  what  practices  are 
unsound  or  unduly  risky,  it  would  ap- 
pear that  the  most  important  qualifica- 
tion for  officers  who  would  insure  their 
companies  against  wreck  in  the  time 
of  stress  is  the  ability  to  resist  tempta- 
tions to  ignore  what  they  know  to  be 
sound  principles  of  finance — an  ability 
which  has  happily  been  displayed  by 
an  overwhelming  majority  of  trust 
company  officials. 

Specific  Lessons. 

Regarding  the  more  specific  lessons 
taught  by  the  panic,  opinions  do  not 
run  so  much  in  the  same  channels.  Mr. 
Enright  regards  the  necessity  of  keep- 
ing a strong  reserve  with  a goodly  pro- 
portion of  actual  cash  in  the  vaults  as 
the  most  important  lesson  of  the  panic. 
Most  of  the  other  writers  mention  this 
as  important,  while  all  would  doubt- 
less so  regard  it.  Mr.  Cohen,  while 
noting  the  importance  of  a fair  re- 
serve in  actual  cash,  expresses  the  opin- 
ion that  it  is  not  of  so  great  importance 
as  the  “second  reserve”  in  gilt-edged 
loans  and  investments  upon  which  the 
company  may  realize. 

Mr.  Wade  believes  that  the  amount 
of  the  cash  reserve  should  be  the  same 
as  that  of  the  state  or  national  banks 
in  the  same  locality.  He  also  takes  a 
stand  in  favor  of  trust  companies  be- 
ing members  of  the  clearing-house  as- 
sociations of  their  cities. 

Two  of  the  writers  sound  warnings 
against  the  tendency  to  pay  excessive 
interest  rates  to  depositors. 

Mr.  Gibson  gives  special  prominence 
to  the  lesson  that  trust  companies  are 
not  independent  of  national  banks,  and 
should  conduct  their  business  in  such  a 
way  as  to  be  in  harmony  with  them. 


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THE  BANKERS  MAGAZINE. 


Among  other  lessons,  Mr.  Dinkins 
points  to  the  importance  of  having  the 
directory  interested  in  and  conversant 
with  the  affairs  of  the  company. 

The  discussion  also  brings  out  the 
opinions  that  the  trust  company  should 
not  trespass  upon  the  field  of  the  com- 
mercial bank;  should  avoid  slow  loans 
and  unmarketable  securities ; should 
place  itself  under  the  same  regulations 
as  commercial  and  savings  banks  if  it 
does  the  same  kind  of  business;  and 
that  the  movement  to  protect  the  use 
of  the  word  “trust"  in  titles  of  cor- 
porations should  be  pushed  with  vigor. 

Mr.  Hulbert  calls  attention  to  the 
fact  that  there  are  several  different 
kinds  of  trust  companies;  a circum- 
stance which  has  an  important  bearing 
upon  the  question.  One  is  led  to  won- 
der whether  the  lessons  of  the  panic 
may  not  hasten  an  evolution  which  will 
more  carefully  define  and  limit  the 
functions  of  the  typical  trust  company, 
and  to  hope  that  the  third  class  of  com- 
panies mentioned  by  Mr.  Hulbert  may 
soon  disappear. 

Lessons  Not  New. 

Several  of  the  writers  point  to  the 
fact  that  the  lessons  of  the  panic, 
though  important,  are  not  new.  They 
have  long  been  known — and  to  their 
credit  be  it  said,  followed — by  the 
great  majority  of  the  men  who  manage 
our  trust  companies.  But  lessons  in 
finance,  like  those  in  other  matters, 
need  to  be  restated  over  and  over  again 
for  the  sake  of  those  who  are  slow  to 
learn  them. 

Of  most  of  the  lessons  above  noted 
it  may  be  said  that  they  are  not  for  the 
trust  company  alone,  but  apply  as  well 
to  commercial  and  savings  banks.  Mr. 
Fuller  states  the  case  strongly  when  he 
says:  “There  are  no  ‘lessons  for  trust 

companies'  revealed  in  the  recent  panic 
other  than  such  lessons  as  were  applic- 
able to  every  class  of  banking  institu- 
tion." The  moral  of  it  all  is  that  for 
the  trust  company  as  well  as  for  all 
other  financial  institutions  there  is  need 
of  measures  to  curb  individuals  of  reck- 
less or  dishonest  disposition;  but  the 


panic  failed  to  produce  evidence  that 
the  trust  company  as  an  institution  is 
not  conducted  according  to  sound  busi- 
ness principles. 


TRUST  COMPANY  SECTION  A.B.A. 

/"OFFICIAL  reports  of  the  Trust 
Company  Section  of  The  Ameri- 
can Bankers'  Association  for  the  year 
ending  May  1,  1908,  indicate  a flour- 
ishing condition.  The  membership 
numbers  883,  which  is  somewhat  over 
sixty  per  cent,  of  the  trust  companies 
in  the  country;  but  most  of  the  larger 
companies  are  members  of  the  section, 
the  aggregate  resources  of  members  be- 
ing nearly  three  and  a half  billion  dol- 
lars, as  against  less  than  four  and  a 
half  billion  dollars  for  the  aggregate 
resources  of  all  trust  companies  in  the 
country.  During  the  eight  months  end- 
ing May  1,  101  new  members  joined, 
an  increase  of  eight  over  the  number 
joining  during  the  same  period  of  the 
preceding  year,  which  was  a time  of 
prosperity.  Strenuous  efforts  for  the 
increase  of  the  membership  are  still  in 
progress. 

The  annual  meeting  of  the  section 
is  to  be  held  at  Denver  on  September 
2.9,  1908,  and  an  excellent  programme 
is  being  prepared.  If  present  plans 
are  successful,  an  important  feature  of 
the  meeting  will  be  a reunion  of  the 
older  members  of  the  section. 


IN  APPRECIATION. 

You  lose  your  coin, 

It  comes  to  pass. 

And  go  to  join 
The  lobster  class. 

“A  fool,”  they  say  in  accents  tart, 
“Must  quickly  from  his  money  part” 

You  toil  and  sweat 
In  sturdy  style; 

Together  get 
Another  pile. 

Then  do  they  roses  at  you  chuck? 

Oh,  no.  They  say,  MA  fool  for  luck.” 
— Louisville  Courier  •Journal 


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THE  RESPONSIBILITY  OF  THE  BANKER. 

By  Charles  W.  Stevenson. 


POLITICIANS,  and  even  men  who 
A profess  to  be  statesmen,  have  a 
habit  of  placing  banks  in  the  list  of 
corporations  that  maintain  the  “money 
power.”  We  have  lately  heard  of  the 
one  hundred  millionaires  who  are  “un- 
desirable citizens”  because  of  the  influ- 
ence they  wield.  And  many  of  them 
are  bankers.  Indeed,  some  have  gone 
farther  and  charged  the  bankers  with 
bringing  on  the  late  panic.  As  if  a 
man  would  pull  down  the  temple  walls 
on  his  own  head! 

Close  Relation  op  Banking  to  Gen- 
eral Business. 

This  leads  us  to  examine  the  real  re- 
sponsibility of  the  banker  with  refer- 
ence to  the  character  and  momentum  of 
the  business  of  the  country.  And  be  it 
said  at  the  outset  that  this  responsibil- 
ity is  very  great. 

So  closely  interwoven  are  banking 
and  business  that  we  must  go  to  the 
latter  to  determine  the  work  and  worth 
of  the  banker.  It  is  a trite  saying  that 
business  is  done  on  credit.  This  is  not 
all  of  the  reality.  This  credit,  which 
is  the  mainstay  of  business,  and  which 
is  furnished  so  largely  by  the  banks  of 
the  country,  is  directed  not  altogether 
by  the  banks.  They  are  servants  of 
the  people  and  cannot  escape  this  posi- 
tion. It  is  controlled  and  directed  by 
the  wants  and  needs  of  the  people.  It 
is  limited  by  the  supply  and  demand 
which  affect  the  life  of  the  people.  It 
is  a part  of  the  time  and  place.  That 
is  to  say,  when  there  is  an  era  of  un- 
precedented prosperity  the  wants  and 
needs  of  the  people,  the  conditions  of 
supply,  are  different  from  those  in  a 
time  of  depression,  or  of  continued 
failure  of  crops  or  languishing  of  in- 
dustries. So  that  the  banker  is  power- 
fully affected  by  the  force  of  this  great 
current  of  business  demands  as  to  his 
supply  and  issue  of  credit.  Moreover, 
this  excess  of  living,  this  added  mo- 


mentum, makes  in  itself  not  only  a de- 
mand but  affects  the  power  of  the  bank 
to  meet  the  demand.  Deposits  foster 
loans  and  loans  create  deposits.  It  is 
here  that  the  silent  expansion  of  credit 
becomes  almost  insiduous.  And  al- 
though the  far-seeing  banker  may 
know  that  the  pace  of  business  is  too 
fast,  he  feels  himself  in  the  current 
and  cannot  wholly  stay  the  tide  if  he 
would. 

And  there  is  another  equation;  this  is 
the  personal  one.  The  banker  must  in 
a sense  adhere  to  the  mind  or  thought 
of  his  customers.  That  is  to  say,  he 
cannot  hold  back,  and,  predicting  a 
panic,  refuse  to  grant  loans  to  meet 
the  ordinary  • conditions  and  require- 
ments of  business,  albeit  the  time  be  one 
of  dangerous  inflation  and  excess.  He 
must  listen  not  only  to  the  voice  of  his 
customer  but  to  the  reasonable  plea  of 
his  depositor.  The  interests  of  the 
banker  and  customer  are  one.  They 
are  indissoluble.  And  it  is  for  this 
reason  that,  noting  the  state  of  mind  of 
the  men  who  deal  daily  with  him,  the 
banker  must,  to  a certain  extent,  ac- 
cept their  views  of  the  state  of  the 
times  and  act  accordingly,  not  becom- 
ing unduly  alarmed  or  unduly  rigid. 
For  those  who  make  the  demands  are 
in  the  thick  of  trade  and  must  sink  or 
swim  with  the  general  movement  of 
commercial  and  financial  affairs. 

And  yet  this  same  banker  in  times  of 
prosperity  and  over-straining  of  busi- 
ness, both  as  to  methods,  volume  and 
credit,  may  be  one  of  the  greatest  of 
restraining  forces,  if,  with  a concert 
of  movement,  he  act  wisely  and  with 
proper  regard  for  the  needs  of  his  cus- 
tomer and  the  necessities  of  the  busi- 
ness world  at  the  time. 

The  Prevention  op  Waste. 

Just  here  is  where  his  great  respon- 
sibility occurs.  In  the  first  place,  it  is 
true  that  trading  should,  as  far  as  it  is 

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THE  BANKERS  MAGAZINE. 


possible,  be  actual  and  real.  That  is  to 
say,  as  far  as  possible  it  is  well  not  to 
encourage  the  fictitious  trades  that 
tend  so  to  inflate  prices  and  to  unduly 
swell  the  demand  for  credit.  This  is 
not  the  prevention  of  those  trades 
which  may  be  settled  without  the  act- 
ual transfer  of  stocks.  This  is  a ques- 
tion that  wc  cannot  determine,  owing  to 
the  rights  of  men  to  trade  when  and 
how  they  please. 

If  the  intent  is  good,  if  it  is  under- 
stood that  actual  and  real  purchases 
are  made,  albeit  they  will  not  in  the 
end  demand  the  actual  production  of 
the  shares,  if  their  equivalent  is  paid, 
it  is  a question  that  governments  can- 
not and  ought  not  to  settle  offhand  as 
to  the  rights  of  the  parties.  But  the 
too  close  and  intimate  connection  of 
the  banks  with  daily  transactions  that 
have  no  pretense  of  being  actual  or 
real,  and  yet  which  affect  the  prices  of 
the  industrial  and  railroad  securities 
of  the  country,  and  through  these  the 
businesses  of  men  everywhere  and  the 
general  welfare  of  all  the  people,  is  a 
question  that  bankers  must  solve. 

How  far  shall  they  allow  themselves 
to  become  interwoven  with  this  form  of 
trading?  The  effects  of  this  sort  of 
fortune-building  are  widespread.  They 
act  upon  the  wages  of  the  worker 
everywhere.  They  make  business  good 
or  bad  in  localities  which  have  no  con- 
nection with  such  trading.  This  is 
true  because  when  there  is  a plethora 
of  the  fictitious  capital  heife  engen- 
dered by  a false  and  hollow  system  of 
trading,  it  seeks  investment  in  dubious 
enterprises  that  waste  the  substance  of 
the  people.  The  billions  of  skrinkage 
of  capital  in  the  prices  of  stocks  in  the 
last  year  represent  no  actual  loss  to  the 
people  of  the  country  save  that  they 
have  given  their  substance  into  hands 
that  have  wasted  it  in  foolish  promot- 
ing or  experimenting  in  plants  for 
which  there  was  no  demand;  have  sim- 
ply allowed  their  good  toil  to  go  to  aid 
the  recklessness  of  those  who  have  frit- 
tered it  away  in  unproved  and  un- 
worthy ventures.  This  is  simply 
waste.  Save  and  aside  from  this,  noth- 


ing real  has  been  lost.  A few  spec- 
ulators who  put  their  profits  in  stable 
values  have  grown  rich,  while  the  inno- 
cent purchasers  have  grown  poor. 

But  the  spirit  engendered  by  this 
trading,  and  this  apparent  though  un- 
real creation  of  wealth,  begets,  through 
the  whole  line  of  business  down  to  the 
smallest  dealer,  a feeling  of  enthusi- 
asm that  always  inevitably  carries 
prices  too  high  above  a general  aver- 
age and  brings  on  the  conditions  that 
result  in  panic  and  subsequent  eco- 
nomic readjustment.  It  is  here,  with 
reference  to  the  widespread  effect  of 
this  trading,  that  the  banker’s  respon- 
sibility becomes  great. 

That  it  is  most  difficult  to  draw  the 
line  must  be  admitted  by  all  thinking 
men.  There  is  a limit  on  either  side. 
There  is  a golden  mean.  The  banker 
is  better  fitted  than  any  other  man  to 
discover  this  and  maintain  it.  Yet  the 
pressure  on  him  to  keep  business  at  the 
pace  which  it  sets  for  itself  is  great 
and  he  cannot  altogether  resist  it. 
There  is  a psychology  about  the  era 
of  prosperity  which  he  is  bound  to  take 
note  of.  To  be  a restraint  when  others 
arc  filled  with  enthusiasm  must  work 
an  ill-feeling  for  himself.  And  yet, 
by  judicious  agreements  and  practices 
as  to  loans  on  the  classes  of  securities 
under  discussion,  bankers  may  do 
much  to  mitigate  the  stringency  that 
comes  with  periodic  and  compelling 
force. 

Nothing  need  be  said  in  this  con- 
nection of  the  right  and  duty  of  the 
banker  to  frown  on  the  promotion  of 
schemes  that  have  no  substance  to 
them,  schemes  which  are  gotten  up  for 
the  purpose  of  giving  men  salaries  and 
a chance  to  sell  shares. 

The  Banker’s  Power  in  Business. 

It  is  most  important  that  the  banker, 
however,  feel  his  responsibility  to  the 
business  interests  of  the  country.  He 
has  proven  in  the  late  stringency  that 
he  is  able  to  carry  on  the  business  of 
the  country  practically  without  money. 
He  is  the  operator  of  a vast  system  of 
credit-making  which  furnishes  the 


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money  of  the  country.  He  should  in- 
sist that  the  powers  which  are  inherent 
in  the  organism  he  has  built  up  ac- 
cording to  the  needs  and  demands  of 
the  business  of  the  country  be  recog- 
nized by  the  Government,  and  that  he 
be  given  the  power  of  the  issue  of  a 
credit  currency,  according  to  his  own 
ideas  "when  these  shall  have  become  a 
unit  throughout  his  own  profession. 
He  has  the  power  thus  to  hold  and  to 
expand  the  business  of  the  country. 

Yet  deeper  than  his  power  it  must 
be  remembered  all  the  time  lie  the 
primal  causes  of  real  and  helpful  pros- 
perity. What  a vast  saving  there  is  of 
human  labor  in  the  machine!  And  yet 
at  the  very  time  invention  is  adding  its 
blessings  to  mankind  it  is  the  cause  of 
idle  hands  and  broken  lives  because 
men  cannot  adjust  themselves  readily 
to  the  new  conditions.  Still,  the  peo- 
ple demand  the  best  and  discard  the 
old  at  a moment's  notice,  regardless  of 
the  fact  that  it  turns  thousands  out  of 
employment.  So  it  is  that  the  mind  of 
man  influences  prosperity.  The  other 
primal  factor  is  the  soil  and  its  in- 
crease. The  aggregated  capital  of 
which  so  many  are  afraid,  affect  not 
the  production  of  the  soil  in  first  in- 
stance. It  will  produce  in  the  way  the 
Divine  intended  and  in  no  other.  Man 
may  tickle  the  soil  a little  and  make  it 
grow  after  his  planting.  But  he  can- 
not direct  the  winds  and  waters  of  the 
globe;  and  lie  is  subject  to  the  laws  of 
nature  all  the  time  and  everywhere. 

To  these  things  business  must  bow 
and  with  it  the  banker.  Yet  he  can 
aid.  His  credit-making  power  is  great. 
It  should  be  exercised  with  a due  sense 
of  its  greatness. 

Community  of  Interest  Between 
toe  Banks  and  the  People. 

These,  of  course,  are  general  consid- 
erations. None  knows  better  than  the 
banker  the  general  bearings  of  his 
business.  He  stands  over  and  above 
*11  commerce  and  finance,  and  holds 
the  throttle  to  much  of  the  advance. 
He  is  the  guide  and  counselor  of  count- 
less business  men.  He  can  withhold 


the  individual  loan  and  does  do  so  if 
he  deems  it  unwise  as  a business  ven- 
ture. He  can  make  or  break  the  force 
of  the  bond  issues  of  the  corporations, 
as  he  is  willing  to  look  upon  them  with 
favor  or  frowning  in  the  light  of  his 
vast  experience  and  his  sense  of  the 
trust  given  him  by  those  who  put  their 
money  in  his  keeping.  After  the  sud- 
den change  of  the  current  of  trade, 
which  we  call  a panic,  is  over,  he  is 
able  to  meet  all  requirements,  his  busi- 
ness being  automatic,  rising  and  fall- 
ing  with  the  state  and  demands  of 
trade.  He  knows  all  these  things,  and 
he  uses  them  in  their  application  to  the 
individual.  If  communities  undertake  to 
float  their  bonds  he  has  a voice  in  the 
sale  and  purchase.  Throughout  the 
realm  of  credit,  even  to  the  minor 
transactions  of  small  men,  he  is  master. 

His  responsibility  is  great.  Be  it 
said  it  is  exercised  with  due  regard  to 
the  confidence  the  people  have  in  him, 
and  for  the  best  interests  of  the  peo- 
ple as  a whole.  No  man  can  truly 
class  the  banks  and  bankers  of  the 
country  among  those  influences  of  so- 
called  wealth  that  are  inimical  to  the 
happiness  of  the  individual  or  of  the 
people  as  a whole.  The  people  own 
the  banks.  Take  from  them  their  de- 
posits and  they  would  lose  a large  part 
of  this  credit  currency  power.  They 
are  amenable  to  the  time  and  place. 
And  the  only  duty  of  the  officer,  be  the 
bank  large  or  small,  is  to  take  care  of 
legitimate  interests,  frown  on  schemes 
to  catch  the  unwary,  stand  for  integrity 
and  the  faithful  discharge  of  every 
obligation,  and  serve  his  customers 
with  kindness  and  wisdom.  ' To  the 
people  he  is  servant,  not  master! 


SPRING  LAMBS. 

I remember,  I remember. 

The  house  where  I was  shorn; 

The  hallowed  place  where  little  lambs 
Come  peeping  in  at  morn; 

The  playful  bears  and  friendly  bulls 
Who  wisely  counselled  me. 

And  where  I bought  at  88— 

And  sold  at  33. 

— Exchange. 


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BOND  AMORTIZATION  IN  THEORY  AND 

PRACTICE. 

By  W.  H.  Kniffin,  Jr. 


'T'HE  question  of  bond  amortization 
A is  not  a new  one — it  is  as  old  as 
finance  and  accounting.  Just  at  pres- 
ent, however,  it  is  a subject  pre-emi- 
nent among  the  savings  bank  men  of 
New  York  state. 

Bankers  who  have  had  more  than 
usual  regard  for  accuracy  in  such  mat- 
ers, and  who  have  kept  their  bond  in- 
vestments according  to  this  idea,  will 


admirable  banking  legislation,  in  which 
was  the  provision  that  all  savings 
banks  in  the  state  must  carry  their  se- 
curities at  their  investment  value,  as 
determined  by  a proper  method  of 
amortization.  So  far  as  is  known,  New 
York  is  the  only  state  that  requires 
this,  and  in  so  doing,  it  has  consider- 
ably improved  an  already  admirable 
savings  bank  law. 


Form  No.  1. 

Form  providing  for  listing  the  bonds  in  detail,  sinking  fund  charges  and  interest  account,  together 
with  other  data.  The  sinking  fund  computations  are  in  very  good  arrangement. 

This  form  is  in  practical  use. 


not  be  disturbed  by  the  current  trend 
of  events;  but  those  who  have  been  do- 
ing otherwise  have  doubtless  had  trou- 
blous nights  and  busy  days  of  late, — 
all  because  of  a little  matter  of  ac- 
counting. 

The  subject  has  been  treated  in  these 
columns  before,  and  in  convention  and 
banking  circles  it  has  been  a frequent 
subject  for  discussion.  The  present 
“trouble”  has  all  come  about  because 
the  last  legislature  did  more  than  pass 
an  anti-gambling  law, — it  passed  some 
28 


It  is  proposed  to  treat  the  subject  in 
two  parts:  First,  what  is  amortization? 
Second,  how  to  do  it. 

The  Theory  of  Amortization. 

According  to  the  Standard  Diction- 
ary, amortization  means  literally  to 
kill;  in  the  field  of  finance,  it  means  to 
“extinguish  a debt  by  the  creation  of 
a sinking  fund.”  In  the  matter  of 
bond  or  stock  investments,  one  of  three 
prices  prevails:  par,  discount,  or  pre- 
mium. In  the  event  of  a purchase 


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BOND  AMOBTIZATION  IN  THEORY  AND  PRACTICE. 


29 


«ortU«  MmV  MiM  a».  tf  « TThf  Ml 

•/  Q*  /{*/  Mr  if  kMlllr 

J?  cfr  UUT  Ttht*.  kiKU»  * 

H4>  {>/«<•«*/' 

M r^ill(»  &MyM|  y»*t^Asr  j-lMS  StUitif  TZmmAer- 


Mini  tai 


I fSEH  e&IH  @9CSSS1^^3  BBS!  f33Pl  2S  S9  * 


ft 


waSEBSBMHEZmMHSBHBHHa 


Form  No.  2. 

Form  providing  for  amortization  account,  interest  record,  list  of  bonds  in  detail,  bond  account,  and 
full  details  regarding  issue,  etc.  A complete  form. 

made  at  par,  one  hundred  cents  will  be  for  a nominal  dollar’s  worth,  but  a full 
paid  for  a dollar’s  worth,  and  one  hun-  dollar  will  be  paid  at  maturity — if  the 

drcd  cents  will  be  received;  in  the  case  investment  is  a good  one;  should  the 

of  a security  purchased  at  a discount,  security  be  of  such  nature  as  to  corn- 
one  hundred  cents  will  not  be  paid  for  mand  a premium,  more  than  a dollar 


Sample  Schedule  D 


BONDER 

TITLE  OP  BOND  CCcrc*C£eS 

DATE  OP  ISSUE  J2c^y  ✓*/.  ^ 

fTUKBEES  /-^VO 

^RERE  PAYA8LE''7$^is/e*B^<><v4r^ 

HOW  PAYABLE  \£,\^ 


INTEREST  AT  2 
INTEREST  WHEN 
NET  INCOME  & 


' WHEN  PAYABLE  (Zm4.  /.  A 4 

MB  %<S  c/^r 

V^CUy  */S?'  S?fO 


80 


THE  BANKERS  MAGAZINE. 


SatfVAAKY  ^I/HEREST — SlflKWQ  Fb/ID  GjnPOTATI^ 

Tkr**# Catfamf  c£/y  < Ot 


sa 

Dfcrt/otion, 

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ITHTT* SKEEtdT 

tinoxTtx/rrzon 

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Form  No.  4. 

Summary  of  interest  accumulations  and  reductions  together  with  accrued  interest.  The  items  can 
be  computed  on  the  amortization  sheets  at  leisure  during  the  period,  and  at  the  end 
the  same  assembled  in  the  general  summary,  from  which  the  report 
to  the  department  can  be  made. 


must  be  paid  for  a dollar’s  face  value, 
and  only  one  hundred  cents  will  come 
back  to  the  owner  at  maturity. 

Now  what  to  do  with  the  gain  on 
one  hand;  and  the  loss  on  the  other;  is 
the  question  amortization  would  solve, 
and  solve  correctly.  It  will  require  no 
long  argument  to  demonstrate  that  the 
full  amount  of  the  discount; — the 
profit;  should  not  be  added  at  a single 
time,  either  at  the  beginning  or  at  the 
end  of  the  life  of  the  investment. 
Likewise,  the  loss  in  the  shape  of 
the  premium  paid,  should  not  be  de- 
ducted at  a single  stroke,  although  in- 
stances are  on  every  hand  where  this 
is  the  custom.  There  is  a better  way: 
keep  hooks  with  this  profit , or  this  loss , 


— and  amortization  is  “just  keeping 
books.”  The  accretion,  on  the  one 
hand,  and  the  deduction,  on  the  other, 
belong  in  a series  of  years,  in  small 
amounts,  with  justice  and  the  square 
deal  for  all.  To  add  the  profit,  or  to 
subtract  the  loss  and  do  it  properly — 
that  is  amortization . 

Amortization  in  Practice. 

In  buying  a bond  or  a stock  for  in- 
vestment purposes,  it  is  supposed  to  be 
held  until  maturity.  The  same  income 
will  prevail  during  its  life  and  the  cor- 
rect value  at  any  given  date  before  or 
after  purchase  can  be  correctly  ascer- 
tained. Only  a sale  of  the  security 
will  alter  the  computation. 


BOND  OF  '7Z**4X*  Yo-r-As 

DESIGNATION  „ INTEREST  RAYA  BUI 

NUMBERS /-/o  DENOMINATIONS  /•••  MATURITY  /-/o HOW  PAYABLE 

INTEREST  &*/•  * 
NET  INCOME 


A simple  form  with  sinking  fund  charges,  with  bonds  kept  in  debit,  credit  and  balance  form. 

A very  good  form. 


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UNIVERSITY 


OF 


BOND  AMORTIZATION  IN  THEORY  AND  PRACTIC^cauf^^ 


Id  thus  "keeping  books"  with  the 
profit  or  loss,  one  of  three  courses  is 
open:  First,  charge  profit  and  lou 

account  with  the  amount  of  the  pre- 
mium at  the  time  of  purchase;  or, 
credit  the  discount  to  profit  and  loss, — 
neither  of  which  is  correct  or  logical. 

Second,  charge  the  premium  hy 
overages,  or  pro  rata;  or,  credit  the 
discount,  likewise. 

Third,  charge  the  premium  in  such 
amounts  that  each  year  will  bear  its 
proper  proportion  of  the  loss ; or, 
credit  the  discount  in  such  amounts 
that  each  year  will  have  its  due  share 
of  such  profits. 

Of  the  last  two,  the  average,  or  pro 
rata  method  is  the  simpler  and  entails 
far  less  labor  than  does  the  last  men- 
tioned. The  New  York  State  Bank 
Department  will  accept  this  method. 


for  example.  Here  is  a six  per  cent, 
bond,  five  years  to  run,  interest  semi- 
annually. If  it  were  to  be  bought  to 
net  the  investor  5.40,  by  turning  to  the 
convenient  little  book  of  bond  tables, 
the  rate  would  be  found  to  be  102.60, 
or  $10,260  for  a block  of  ten  bonds. 
There  are  ten  interest  periods,  and  fol- 
lowing the  above  rule,  we  divide  the 
$260.00  by  10,  having  $26.00  as  the 
proper  charge  against  each  year. 

It  will  be  noted  that  the  true  or  actual 
interest  is  the  interest  received,  less  the 
amortization;  or,  the  amount  invested 
X the  net  rate,  which  will  be  the  net 
income  on  the  whole  amount  invested. 
This  will  not  be  absolutely  correct  un- 
less the  scientific  method  is  used.  (See 
Table  3.)  In  the  case  of  serial  bonds 
the  average  method  is  not  so  well  adapt- 
ed, and  this  will  be  explained  later. 


Table  No.  1 — Avxbage  ob  Pro  Rata  Method  or  Amortization. 


6%  Bond  on  a 5.40  basis,  5 years  to  run,.  Interest  due  semi-annually. 


For  method  of  ascertaining  the  amortization  see  text. 


Investment 


Date. 

Cost 

Par  value. 

Interest 

Interest 

Amortiza- 

Value 

(Gross). 

(True). 

tion. 

(Book 

value). 

1905 

July  1 

$10,260 

$10,000 

$10,260 

1906 

Jan.  1 

$300 

$274 

$26 

10,234 

July  1 

300 

274 

26 

10,208 

1907 

Jan.  1 

300 

274 

26 

10,182 

July  1 

300 

274 

26 

10,156 

1908 

Jan.  1 

300 

274 

26 

10,130 

July  1 

300 

274 

26 

10,104 

1909 

Jan.  1 

300 

274 

26 

10,078 

July  1 

300 

274 

26 

10,052 

1910 

Jan.  1 

300 

274 

26 

10,026 

July  1 

300 

274 

26 

10,000 

$3,000 

$2,740 

$260 

Market 

Value.* 


Bond  due 


• The  market  value  and  Investment  or  book  value  are  not  Identical.  The  market  value 
is  the  price  the  bonds  weald  bring  if  sold.  It  might  be  more,  or  less,  than  the  value  ascer- 
tained by  amortization,  depending  upon  market  conditions. 


The  idea  is  simply  this:  If  a bond 

carries  a premium  or  a discount,  ascer- 
tain how  many  interest  periods  there 
will  be  during  its  life,  and  divide  the 
discount,  or  the  premium  by  the  num- 
ber of  periods,  and  the  result  is  the 
proper  charge  against,  or  the  proper 
credit  to  each  of  the  various  years.  Not 
absolutely  correct,  but  near  enough  for 
all  ordinary  purposes.  Take  Table  1, 


In  the  matter  of  bonds  at  a discount, 
the  case  is  reversed,  and  Form  No.  S 
(not  Table  3)  will  show  the  accre- 
tions according  to  this  method.  The 
addition  to  the  investment,  or  holding 
value,  is  uniform  each  period  until  the 
bond  stands  exactly  at  par  when  due 
— the  amount  that  will  be  received 
for  it. 

In  amortizing  from  an  accurate 


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THE  BANKERS  MAGAZINE. 


Table  No.  2 — Amortization  of  Bond  at  Discount. 
Scientific  Method. 

S%  Bond  on  5.7 5 basis,  5 years  to  run. 

Amorti- 


True 

Interest 

zation 

Investment 

Date. 

Cost. 

Par  value.  Interest. 

Rec’d. 

(Accumula-  or  Book 

tion.) 

Value. 

1905 

July  1 

$8,820 

$10,000 

$8,820.00 

1906 

Jan.  1 

$253.07 

$150 

$103.07 

8,923.07 

July  1 

256.53 

150 

106.53 

9,029.60 

1907 

Jan.  1 

259.60 

150 

109.60 

9,139.20 

July  1 

262.72 

150 

112.72 

9,251.92 

1908 

Jan.  1 

265.47 

150 

115.47 

936739 

July  1 

269.30 

150 

119.30 

9,486.69 

1909 

Jan.  1 

272.22 

150 

122.22 

9,608.91 

July  1 

276.23 

150 

126.23 

9,735.14 

1910 

Jan.  1 

279.88 

150 

129.88 

9,865.02 

July  1 

283.09 

150 

133.09 

$10,000.00  bonds  due 

+1.89* 

$3 ,678.11 

$1,180.00 

NOTE — Had  the  price  $8,820  beer  absolutely  correct,  the  problem  would  have  worked 
out  correctly  without  this  balance.  Same  table  used  for  cost  price  as  in  Table  8,  but  the 
computation  is  independent  of  tableE.  Rule:  Multiply  the  Investment  Value  by  the  net 

rate,  which  gives  the  true  Interest.  Subtract  Interest  Received  and  the  difference  Is  the 
accumulation  or  reduction. 


standpoint,  more  detail  and  additional 
labor  is  required,  but  in  large  issues,  it 
is  much  the  better  way.  Hlere  the 
actual  value,  at  the  purchase  rate  is 
ascertained  to  a nicety.  This  result 
may  be  accomplished,  either  by  using 
the  bond  tables  (the  ordinary  tables  do 
not  carry  out  the  decimals  far  enough 
to  get  the  accurate  cost  price,  without 
which  the  problem  will  not  balance), 
or  by  taking  the  cost  as  the  multiplicand 
and  multiplying  this  by  the  income,  or 
net  rate,  which  will  give  the  true  in- 
terest; this  subtracted  from  the  inter- 
est received  will  give  the  amortization. 
If  the  bond  tables  are  used  it  is  a sim- 
ple matter  of  finding  proper  pages  and 
columns.  Table  No.  2 will  show  this 
as  applied  to  a bond  at  a discount,  by 
the  proper  method.  By  comparing 
Table  No.  2 with  form  8 , it  will  be 
seen  that  the  average  amortization  is 
$118.00,  while  the  true  method  gives 
but  $103.07  for  the  first  period  and 
$131.98  for  the  last. 

The  case  of  serial  bonds  is  some- 
what different.  In  order  to  get  the 
correct  cost  price,  it  will  not  do  to  say: 
“This  lot  averages  six  years/*  and  turn 
to  the  bond  table  at  the  six-year-page. 


and  get  the  rate.  The  cost  of  one  bond 
for  one  year,  the  next  for  two,  the 
next  for  three,  and  so  on,  must  be 
found  and  added  together — then  the 
price  will  amortize  correctly  to  a cent. 

To  get  the  proper  amortization 
charge  against  the  Glenville  Bonds  by 
the  pro  rata  method,  as  in  form  2,  we 
take  the  premium,  $23.40  and  divide 
by  the  time  to  run,  2^  years,  and  we 
get  $9. 3 6 as  the  proper  amortization 
charge  for  each  year.  But  they  are 
serial  and  the  full  amount  is  only 
working  during  the  first  year,  and  as 
the  bonds  mature,  less  and  less  in 
amount  is  invested;  we  can  get  the  cor- 
rect amount  in  this  way: 


Out  of  the  first  year’s  earnings,  we 
take  4-4  of  the  average  amortiza- 
tion (4  bonds  are  alive)  9.36 

Out  of  the  second  period,  we  take 
3-4  of  the  average  amort.  (3  bonds 

are  alive)  7.02 

Out  of  the  third  period,  we  take  2-4 
of  the  average  amort.  (2  bonds  are 

alive)  ^.68 

Out  of  the  fourth  period,  we  take  1-4 
of  the  average  amort 2.34 


We  have  the  result,  10-4,  or  2%  and 
the  full  premium  returned  23.40 


The  rule  for  amortizing  a serial 
bond  as  suggested  above  and  recom- 
mended by  the  New  York  Banking 


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BOND  AMORTIZATION  IN  THEORY  AND  PRACTICE. 


83 


Table  No.  3 — Scientific  Method  of  Amortization. 
6%  Bond  having  5 years  to  run,  on  a 5.40  basis. 


(Values  at  the  different  periods  from  the  Bond  Tables  of  Montgomery  Rollins.) 


Cost  or 

Book  or 

Date. 

Market 

Par  value. 

Interest 

True 

Amorti- 

Investment 

Value. 

Rcc’d. 

Interest 

zation 

Value. 

1905 

July  1 

$10,260 

$10,000 

$10,260 

1906 

Jan.  1 

$300 

$277 

$23 

10,237 

July  1 

300 

276 

24 

10,213 

1907 

Jan.  1 

300 

276 

24 

10,189 

July  1 

300 

275 

25 

10,164 

1908 

Jan.  1 

300 

275 

25 

10,139 

July  1 

300 

273 

27 

10,112 

1909 

Jan.  1 

300 

273 

27 

10,085 

July  1 

300 

273 

27 

10,058 

1910 

Jan.  1 

300 

271 

29 

10.029 

July  1 

300 

271 

29 

10,000  bonds  due 

$3,000 

$3,740 

$260 

NOTE — The  tables  referred  to  aoove  are  extended  to  two  decimals  only.  If  an  “ex- 
tended bond  table"  had  been  used,  the  above  amortization  charge  would  have  been  ex- 
pressed In  cents  also. 


Department  is: — 1.  Divide  the  pre- 
mium or  the  discount  by  the  average 
time  to  run,  which  will  give  the  amorti- 
zation charge  for  the  first  year.  2. 
Divide  this  amount  by  the  number  of 
bonds  in  the  series  and  the  quotient 
will  be  the  amount  to  deduct  each  year, 
from  the  preceding  year’s  amortiza- 
tion. This  works  admirably  in  cases 
where  the  bonds  begin  to  mature  from 
date  of  issue  or  purchase,  and  is  al- 


most as  correct  in  its  results  as  the 
scientific  method. 

But  in  cases  where  one  or  more 
years  elapse  before  the  series  begins 
to  fall  due,  it  will  not  work.  In  such 
instances,  the  amortization  for  the 
first  year  will  be  the  amortization  for 
each  year  until  the  bonds  begin  to 
mature.  To  illustrate:  A series  of 

bonds  issued  in  1907,  the  first  maturity 
falling  on  July  1,  1912,  and  running 


Table  No  4 — Amortization  of  Serial  Bonds. 


5%  Bond,  due  serially,  1 to  4 years  ( average  2%  years),  on  4%  basis — Scientific  Method . 


Date. 

Par  value. 

Cost 

Gross 

True 

Amortiza- 

Investment 

Interest  Interest. 

tion. 

Value. 

1907  July  15 

$3,000 

$2,023.40 

$2,023.40 

1908  Jan.  15 

$50.00 

$45.45 

$4.55 

2,018.85 

July  15 

50.00 

45.35 

4.65 

1,514.20 

1909  Jan.  15 

37.50 

34.03 

3.47 

1,510.73 

July  15 

37.50 

33.94 

3.56 

1,007.17 

1910  Jan.  15 

25.00 

22.68 

2.32 

1,004.85 

July  15 

25.00 

22.61 

2.39 

502.46 

1911  Jan.  15 

12.50 

11.30 

1.20 

501.26 

July  15 

12.50 

11.24 

1.26 

500.00  bond  due 

Same  example  as  In  form  2.  To  get  the  average  amortization  on  a serial  bond,  divide 
the  premium  by  the  average  number  of  years  to  run,  which  gives  the  amortization  for  the 
first  year.  Of  this  amount,  take  as  many  parts  as  there  are  bonds  unmatured  for  each  year. 
(See  text)  Or,  we  may  divide  the  premium  $23.40  by  2*4,  the  number  of  years  to  maturity 
(average),  which  gives  $9.36,  which  is  the  first  amortization.  There  being  one  bond  ma- 
tured the  first  year,  for  the  second,  the  amortization  will  be  $9.36  less  one-quarter  of  $2.34, 
giving  $7.02  as  the  proper  charge  for  the  second  year.  The  third  year  has  $7.02  less  one- 
quarter  of  the  $9.36,  $2.34,  or  $4.68  for  the  third  year;  for  the  fourth  year,  we  have  $4.68  less 
one-quarter,  $2.34,  or  $2.34  for  the  last  year.  The  sum  of  which  makes  $23.40. 

3 


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34 


THE  BANKERS  MAGAZINE. 


Table  No.  5 — Contrast  Between  the  Scientific  and  Pro  Rata  Methods. 

4.40  Serial  Bond,  due  1912-1921,  on  4%  baste,  average  9%  years..  Average  amortization 
15.27.  Premium  $14.50.*  Purchased  1907. 


SCIENTIFIC 

PRO  RATA. 

Amortiza- 

Pre- 

Amortiza- 

Pre- 

tion. 

mium. 

ition. 

mium. 

$145.00* 

$145.00 

1908 

912.7S 

132.27 

1908 

915.27 

129.73 

1909 

13.29 

118.98 

1909 

1527 

114.46 

1910 

13.87 

105.11 

1910 

15.27 

99.19 

1911 

14.47 

90.64 

1911 

15.27 

83.92 

1912 

15.13 

75.51 

1912 

15.27 

68.65 

1913 

13.89 

61.62 

1913 

13.74 

54.91 

1914 

12.56 

49.06 

1914 

12.21 

42.70 

1915 

11.18 

37.88 

1915 

10.68 

32.02 

1916 

9.83 

28.05 

1916 

9.15 

22.87 

1917 

8.35 

19.70 

1917 

7.62 

15.25 

1918 

6.80 

12.90 

1918 

6.09 

9.16 

1919 

5.15 

7.75 

1919 

4.56 

4.60 

1920 

8.48 

4.27 

1920 

2.03 

1.57 

1921 

1.72 

2.55* 

1921 

1.57** 

9W45  fl45.00 


• This  will  illustrate  the  point  made  In  the  body  of  the  article  regarding  the  rate  on 
serial  bonds.  This  rate  was  obtained  by  taking  the  average  time  and  getting  the  rate  for 
that  time  from  the  table.  A residue  of  $2.55  Is  left,  showing  the  price  to  have  been  in- 
accurate. Had  the  price  for  each  bond  been  obtained  and  added  together,  the  result  would 
have  been  correct.  The  correctness  of  the  rate  does  not  effect  the  pro-rata  amortization. 

••  Seven  cents  overplus  added  to  last  amortization. 


serially  to  1921.  The  average  is  9^2 
years.  This  divided  into  the  premium, 
$145.00  gives  $15.27  as  the  ' proper 
charge  for  the  first  year.  This  is  also 
the  charge  for  each  year  up  to,  and 
including  1912,  after  which  $1.53 
must  be  taken  off  each  year. 

Table  5 is  a contrast  between  the 
scientific  method  and  the  pro  rata,  and 
will  show  how  closely  the  one  follows 
the  other  according  to  this  idea.  If 
the  Bank  Department  rule  were  fol- 
lowed, it  would  not  amortize  nearer 
than  $87.82. 

All  very  nice,  when  the  bonds  are  of 
recent  purchase  and  the  operation  can 
be  done  from  the  beginning,  but  when 
some  time  has  elapsed  since  the  pur- 
chase, the  process  is  a little  more  tire- 
some. Presuming  we  were  required 
to  furnish  this  data  on  July  1st,  1908 
(which  was  the  case),  and  we  desired 
the  amortized  value  of  the  bonds  in 
the  first  table,  first  by  the  average, 
then  by  the  scientific  method.  We  go 
at  it  this  way: — Not  including  the  cur- 


rent six  months,  five  periods  have 
elapsed  since  the  time  of  purchase. 
Presuming  that  no  amortization  has 
been  previously  provided  for,  we  first 
ascertain  the  average  amortization  for 
each  period,  and  multiply  this  by  the 
number  of  periods  (5)  and  we  have 
as  a result,  $130.00.  If  the  table  (1) 
be  consulted,  it  will  be  seen  that  if 
this  amount  be  deducted  from  the  orig- 
inal cost,  it  will  leave  $10,130  as  the 
holding  value  on  Jan.  1,  1908.  If  the 
charge  for  the  current  period  be  de- 
ducted also,  we  get  $10,104 — the 
amount  the  bonds  are  worth  at  their 
amortized  value  on  July  1st,  1908. 

Should  the  scientific  method  be  pre- 
ferred, the  easiest  way  is  to  first  get 
the  time  the  bonds  have  to  run  before 
maturity.  Taking  the  rate  of  the  is- 
sue, and  the  net  income,  by  turning  to 
the  bond  table,  the  correct  rate  may 
easily  be  found,  and  this  will  represent 
the  amortized  value  at  the  present  time. 

Having  acquainted  ourselves  with 
the  present  value  of  the  bond  invest- 


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35 


ments.  the  next  thing  to  do  is  to  get 
the  books  to  correspond  with  the  new 
valuation.  Bonds  bought  below  par 
and  still  carrying  the  same  book  value 
must  be  charged  with  the  difference  in 
value.  Those  purchased  at  discount, 
and  the  profit  immediately  credited  must 
be  reduced  to  the  present  holding 
value.  Those  purchased  at  a premium 
and  this  premium  immediately  charged 
off,  must  have  the  difference  charged 
back  to  them.  If  still  held  at  cost, 
they,  too,  must  be  reduced  to  meet  the 
new  valuation.  In  each  event,  the 
proper  entry  must  be  made  against 
profit  and  loss  account.  If  desired 
the  entries  may  be  made  through  Pre- 
mium Account,  and  the  difference  ad- 
justed in  the  profit  and  loss  account. 

All  this  will  necessitate  new  forms. 
Those  reproduced  herewith  are  offered 
merely  as  suggestive,  for  each  one  will 
have  notions  of  his  own,  that  no  stock 
form  will  meet.  Simplicity  should  be 
the  aim,  yet  have  the  data  complete. 
Most  of  the  forms  that  have  come  to 
the  writer’s  attention  have  no  provision 
for  the  interest  accounting,  which 
would  seem  to  be  of  some  importance, 
as  it  is  part  of  the  record,  and  must 
be  kept  somewhere;  the  bond  account 
would  seem  to  be  the  place.  If  kept 
in  the  amortization  ledger,  nothing  but 
the  principal  account  need  appear  on 
the  general  ledger.  Form  1 covers 
everything  but  provision  for  selling 
the  bonds;  form  2 has  this  provided 
for.  The  two  maybe  combined  if  desired. 

Whatever  the  form  or  method  se- 
lected, it  will  mean  much  careful  work 
if  the  bond  holdings  are  large,  but 
once  done  it  will  be  worth  the  time 
and  trouble  it  has  caused,  and  it  is 
the  only  correct  test  of  earning  capa- 
city. In  no  other  way  can  the  savings 
bank  man  know  the  exact  condition  of 
his  bank.  Some  will  welcome  it; 
others  condemn  and  criticise  it, — but 
all  (in  New  York)  will  have  to  do  it, 
one  way  or  t’other,  just  the  same. 

Note: — Forms  1 and  2 and  summary 
sheet  are  original  and  are  covered  by 
magazine  copyright.  Permission  to  use 
may  be  obtained  upon  request. 


NAME  NOT  FOR  SALE. 

Grover  Cleveland’s  long  and 

active  life  was  replete  with  incidents 
that  impressed  themselves  upon  the 
minds  of  his  friends  and  served  to  illustrate 
his  character.  One  of  these  concerned  an 
offer  made  him  to  become  president  of  one 
of  the  large  New  York  trust  companies. 

A committee  of  officials  of  the  trust 
company  waited  upon  Mr.  Cleveland  after 
his  retirement  from  the  White  House  and 
urged  that  he  accept  the  presidency  of  this 
concern.  He  told  the  committee  that  he 
was  totally  unversed  in  the  ways  of  bank- 
ers, and  that  he  would  be  of  no  use  what- 
ever to  the  trust  company.  Then  he  said 
point  blank  that  he  would  not  accept.  In 
a comparatively  short  time  the  committee 
visited  him  again.  The  spokesman  said  to 
him,  in  effect: 

“Mr.  Cleveland,  while  we  recognize  that 
there  is  a great  deal  of  truth  in  what  you 
told  us  about  your  not  understanding  bank- 
ing and  being  therefore  unfitted  for  the 
presidency  of  our  company,  we  nevertheless 
feel  that  the  bank  will  be  greatly  benefited 
through  having  the  advantage  of  your  judg- 
ment and  intellect,  and  we  are  so  sure  that 
this  is  the  case  that  we  are  willing  to  pay 
you  $50,000.” 

It  had  been  assumed  that  this  handsome 
offer,  made  at  a time  when  Mr.  Cleveland 
was  none  too  well  off,  would  have  the 
effect  of  making  him  change  his  mind.  It 
had  the  opposite  effect,  however. 

“So,”  said  Mr.  Cleveland,  shortly.  “Well, 
gentlemen,  I long  ago  determined  not  to 
sell  the  influence  of  my  name,  and  I don’t 
intend  to  depart  from  that  determination. 
Thank  you.” — New  York  Time*. 


MUST  BE  TRUE  TO  HIGH  PRINCI- 
PLES. 


TO  a certain  element  within  the  Repub- 
lican party,  who  seek  to  use  that 
organization  to  advance  their  private 
interests,  the  following  extract  from  a re- 
cent letter  written  by  Governor  Hughes  of 
New  York  is  earnestly  commended: 


The  Republican  party  has  unexampled  op- 
portunity and  Is  under  the  heaviest  obliga- 
tions to  the  people.  Upon  its  courage,  its 
wisdom,  and  its  devotion  to  rational  progress 
largely  depend  the  future  welfare  of  the 
country.  It  must  stand  against  every  attempt 
to  corrupt  administration,  against  every 
form  of  special  privilege  at  the  expense  of 
public  right,  against  every  effort  to  control 
the  working  of  our  Institutions  for  selfish 
advantage.  It  must  continue  to  represent 
good  sense  in  opposition  to  demagogical 
follies  and  whimsies.  It  must  stand  for  con- 
stitutional rule  and  for  the  maintenance  of 
law  and  order. 

It  must  be  a people’s  party  in  the  truest 
sense,  ever  exhibiting  sincere  interest  In  the 
common  welfare  and  attachment  to  the  prin- 
ciples of  honest  representative  government, 
which  is  the  foundation  of  all  progress  and 
the  security  of  thrift  and  industry. 


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SAVINGS  BANKS 


A VALUABLE  ADJUNCT  TO  A SAVINGS  BANK. 


By  Andrew  Price. 


TN  conjunction  with  their  efforts  to 
increase  and  enlarge  the  scope  of 
their  business,  the  progressive  savings 
banks  of  the  country  are  spending 
large  amounts  in  advertising,  in  the  at- 
tempt to  educate  the  people  in  the  im- 
portance of  thrift.  Thus  we  can  hard- 
ly pick  up  a newspaper  or  magazine 
but  the  words  “Economize/*  “Be 
Thrifty/*  “Start  Saving  Now/*  or 
countless  other  similar  expressions 
catch  our  eye.  Yet,  for  all  this,  condi- 
tions seem  to  be  about  the  same  as  for- 
merly and  there  appear  to  be  as  many 
poor  and  destitute  in  our  cities.  But 
this  apparent  lack  of  results  by  no 
means  proves  that  the  banks  are  on  the 
wrong  tack  in  attempting  to  educate 
the  public,  only,  that  they  have  not  se- 
lected a receptive  class  of  pupils.  They 
are  only  mistaken  in  trying  to  teach  a 
man  of  mature  years  how  and  why  to 
save,  for  it  is  as  hard  to  do  this  as  it 
is  to  break  an  old  dog  of  bad  tricks. 
A man  whose  habits  arc  all  formed  and 
who  has  felt  the  burden  and  responsi- 
bility of  a family  for  a number  of 
years,  finds  it  difficult  to  change  his 
plan  of  living,  even  though  he  realizes 
his  errors. 

Thf  Saving  Habit  Should  Be 
Formed  Early. 

However,  it  is  entirely  different  with 
a child,  for  he  is  susceptible  to  any  in- 
fluence that  is  brought  to  bear  upon 
him,  and  when  shown  the  sins  of  ex- 
travagance and  made  to  realize  the 
pain  and  deprivations  which  are  at- 
tendant upon  wanton  waste,  he  readily 
concurs  in  all  endeavors  to  better  his 


condition,  and  as  a result  acquires  the 
habit  of  thrift.  Thus  we  see  the  salva- 
tion of  the  bank  and  all  commercial  en- 
terprises to  a great  extent  lies  in  the 
education  of  the  child,  and  that  by  his 
instruction  along  proper  lines  the  re- 
sult will  be  obtained  which  has  long 
been  sought  for  by  banks. 

This  fact  was  appreciated  by  the 
Germans  some  eighty-seven  years  ago, 
when  there  was  established  in  Geslar 
a system  of  School  Savings  Banks, 
which  has  since  been  adopted  by  all 
the  leading  countries  of  Europe.  The 
wonderful  success  of  the  plan  abroad 
attracted  the  attention  of  prominent 
bankers  and  educators  in  the  United 
States,  and  as  a result  it  was  estab- 
lished here  in  1885.  Since  that  time  its 
growth  has  been  phenomenal;  the  plan 
having  been  adopted  by  more  than 
1098  schools  in  113  cities  in  22  states 
up  to  January  1,  1907.  Its  principal 
value  to  the  people  as  a whole,  and  the 
one  for  which  it  was  created,  is  the 
teaching  of  thrift,  but  it  has  proven 
profitable  to  savings  banks  in  another 
respect,  which  is  as  a growing  asset. 

The  great  problem  of  savings  banks 
is  how  to  reach  and  come  in  close  con- 
tact with  the  people.  Many  schemes 
have  been  evolved;  many  plans  tried 
and  many  theories  advanced  for  the  ac- 
complishment of  these  results,  yet  the 
question  still  troubles  the  minds  of 
many.  We  have  often  heard  stories  of 
successful  insurance  agents  and  their 
ability  to  get  hold  of  the  very  heart- 
strings of  a man  by  merely  mentioning 
the  name  of  his  child,  and  thus  write  a 
large  policy,  but  few  of  us  have 


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SAVINGS  BANKS. 


37 


thought  out  the  reason  for  this.  It  is 
simply  the  appealing  to  a man  through 
that  which  is  nearest  and  dearest  to 
him — his  child.  Nature  has  given  to 
every  parent  a love  peculiar  to  itself ; 
the  love  that  sacrifices  all  for  the  ob- 
ject of  its  affection.  And  we  see  there 
really  is  a wonderful  and  eternal  force 
which  the  insurance  agent,  like  many 
others,  had  blundered  upon  and  which, 
it  is  true,  is  often  abused.  However,  a 
proper  use  of  this  element  can  be  made 
to  be  very  beneficial  to  a savings  bank. 

The  general  interest  in  the  develop- 
ment and  growth  of  the  younger  gen- 
eration causes  the  adults  to  be  daily 
familiar  with  their  actions,  so  that 
when  the  child  comes  home  with  his 
little  school  savings  bank  deposit  book, 
the  parent  naturally  takes  a great  deal 
of  interest  and  pleasure  in  inspecting 
it,  as  well  as  all  printed  matter  the  de- 
pository of  the  school  savings  bank 
may  publish.  Not  only  does  this  ap- 
ply to  the  parent,  but  to  most  of  the 
relatives  and  friends  of  the  little  de- 
positor. 

So,  we  see  the  bank  which  incorpo- 
rates a system  of  school  savings  banks, 
or  is  made  the  depository  of  such  a 
system,  has  the  entree  into  the  very 
heart  of  the  homes  of  the  mass  of  the 
people;  that  every  school  child,  though 
ignorant  of  the  fact,  is  the  most  valu- 
able advertising  agent  the  bank  could 
have,  for  he  at  all  times  has  the  privi- 
lege of  an  audience  with  his  parents 
and  grown-up  friends,  and  by  merely 
manifesting  his  interest  in  the  savings 
bank  wins  the  interest  of  those  to 
whom  he  talks.  The  results  of  this  can 
only  be  estimated  at  best.  Not  only 
does  the  bank  receive  the  account  of 
the  child,  which  in  itself  is  worthy  of 
notice,  but  it  often  receives  the  busi- 
ness of  the  child’s  parents  and  friends. 
All  the  time  it  is  building  for  “future 
business,”  the  business  of  the  boy 
when  he  has  grown  to  be  a man,  while 
the  system  is  a constant,  inexpensive 
and  most  profitable  advertising  me- 
dium. Moreover,  many  parents  who 
are  kept  from  depositing  their  small 
savings  merely  on  account  of  pride. 


have  their  children  act  as  their  agents 
in  so  doing.  School  savings  banks 
therefore  bring  the  concern  which  they 
represent  in  contact  with  this  class 
whom  it  has  previously  been  impossible 
to  reach. 

As  above  stated,  the  deposit  of  the 
child  is  worthy  of  notice.  The  aggre- 
gate of  school  savings  deposits  of  one 
Pittsburg  bank  amounts  to  more  than 
$138,000.  So  profitable  has  this  bank 
found  this  class  of  business  that  be- 
tween the  years  1898  and  1907  they 
had  been  instrumental  in  establishing 
the  system  in  fifteen  cities  and  towns, 
in  which  there  were  eighty-six  schools 
and  1226  teachers.  Their  literature 
has  been  distributed  among  the  homes 
by  more  than  57,500  students,  of  which 
number  33,685  were  depositors. 

It  is  impossible  to  know  the  exact 
results  of  this  widespread  publicity, 
yet  it  is  safe  to  say  that  the  bank  owes 
a large  share  of  its  business  other  than 
school  deposits,  to  the  system  of  school 
savings  banks. 

Strange  as  it  may  seem,  it  is  the 
consensus  that  children  depositors  are 
one  of  the  most  satisfactory  classes  to 
a bank.  In  the  recent  financial  dis- 
turbance, bankers  had  the  least  trouble 
with  the  children  depositors;  and,  un- 
like the  other  lines  of  deposits,  these 
accounts  increased  during  that  period. 

The  amount  of  withdrawals  by  the 
children  is  always  small  and  they  occur 
very  seldom.  The  account  is  practically 
constant  and  a bank  can  almost  figure 
to  a dollar  the  amount  it  will  have  to 
pay  during  a specified  time,  the  knowl- 
edge of  which  fact  is  very  beneficial. 

School  savings  banks  are  all  based 
upon  the  same  fundamental  principle 
and  differ  only  in  operation.  The 
Thiry  System,  which  is  in  most  com- 
mon use,  was  deduced  from  the  most 
successful  European  plans.  It  is 
simply  the  depositing  of  the  savings  of 
pupils  with  their  teacher  on  a specified 
day  each  week.  The  teacher  gives 
them  credit  on  a blank  provided  for 
that  purpose  and  directly  or  indirectly 
turns  the  money  over  to  a local  bank, 
which  pays  for  the  necessary  Station- 


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THE  BANKERS  MAGAZINE. 


erv,  etc.  The  deposit  slips  are  filled 
out  by  each  individual  pupil  and  the 
whole  procedure  requires  about  ten 
minutes  or  less  per  week.  As  it  is  a 
regular  part  of  the  school  routine,  no 
extra  work  is  forced  upon  the  teacher. 
Mr.  Samuel  Andrews,  Superintendent 
of  the  Pittsburg  Schools,  says  in  a let- 
ter written  December  17,  1907:  “We 

have  had  school  savings  bank  accounts 
for  a number  of  years  and  the  teach- 
ers, pupils  and  parents  are  all  enthusi- 
astic about  the  same.”  This  proves  the 
system  adaptable  to  a city  with  a large 
number  of  schools.  Spokane,  Wash- 
ington, uses  practically  the  same  plan 
in  her  twenty-one  school  houses  as  do 
the  fifty-nine  schools  of  Kansas  City, 
Missouri,  the  twenty-two  schools  of 
Long  Island  City,  New  York,  and 
many  others  throughout  the  country. 

Another  plan,  a rather  later  creation, 
is  the  Stamp  System,  which  differs 
from  the  one  just  referred  to,  only  in 
that  the  teacher  when  receiving  the  de- 
posits of  pupils  gives  them  stamps, 
which  they  stick  on  folders  provided 
for  the  purpose,  instead  of  a receipt  or 
crediting  the  amount  in  books.  This 
method  has  been  adopted  in  the  schools 
of  Grand  Rapids  and  other  cities  of 
Michigan  and  elsewhere.  It  is  very 
successful,  and  especially  attractive  to 


the  young  depositors  on  account  of  the 
colored  stamps,  which  seem  to  fasci- 
nate them. 

Aside  from  any  pecuniary  interest 
banks  may  have  in  the  plan  of  school 
savings  banks,  they  are  interested  in 
them  on  account  of  their  great  civic 
force,  for,  as  a result  of  their  incorpo- 
ration. pauperism  is  reduced  and  the 
consequent  expense  to  the  public  neces- 
sary to  keep  this  class.  It  aids  greatly 
in  the  checking  of  all  evil  habits,  and 
above  all  puts  a check  upon  the  alarm- 
ing increase  of  the  non-producing 
class,  by  educating  the  children  to  be 
producers  and  savers,  and  thereby 
helps  in  the  idealization  of  American 
citizenship. 

In  conclusion;  these  institutions  are 
most  valuable  adjuncts  to  savings 
banks.  They  bring  the  bank  in  the 
closest  and  most  agreeable  connection 
with  the  public.  They  act  as  a con- 
stant source  of  deposits,  and  are  an 
everlasting  and  ideal  advertising  me- 
dium, at  minimum  cost.  Their  deposits 
are  constant.  They  educate  the  public 
along  lines  which  improve  the  moral, 
mental  and  financial  status  of  the  peo- 
ple. They  arc  a great  philanthropic 
enterprise  and  therefore  appeal  to 
every  high-minded  banker.  They  build 
for  future  business. 


CHANGES  IN  THE  SAVINGS  BANK  LAWS  OF 
MASSACHUSETTS. 


'T'H ROUGH  the  courtesy  of  Hon. 

A Pierre  Jay,  Savings  Bank  Com- 
missioner of  Massachusetts,  we  are  able 
to  present  the  following  information 
respecting  changes  recently  made  in 
the  laws  of  Massachusetts  relating  to 
savings  banks: 

Closer  Supervision. 

Closer  supervisory  powers  are  given  to 
the  bank  commissioner  than  at  present  ex- 
ist; the  unauthorized  banking  law  is  broad- 
ened to  cover  forms  of  banking  not  here- 
tofore included;  and  all  trust  companies, 
instead  of  only  those  incorporated  before 
January  1,  1905,  are  allowed  to  receive 
savings  deposits,  in  view  of  the  fact  that 


a law  has  been  passed  requiring  trust  com- 
panies which  receive  savings  deposits  to 
keep  them  in  a separate  department  and  in- 
vest them  under  the  savings  bank  law. 

Incorporation  of  Savings  Banks. 

Heretofore  all  savings  banks  have  been 
specially  chartered  by  the  Legislature,  but 
the  bill  provides  that  in  future  they  may 
be  incorporated  in  the  same  manner  as 
trust  companies  and  co-operative  banks,  by 
authority  of  a board  composed  of  the  Bank 
Commissioner,  the  Treasurer  and  Receiver- 
General  and  the  Commissioner  of  Corpora- 
tions. 

Duties  of  Boards  of  Investment. 

The  duties  of  boards  of  investment  are 
carefully  described,  and  it  is  made  obliga- 


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SAVINGS  BANKS. 


39 


toiy  upon  such  boards  to  approve  all  loans 
made  by  their  bank,  all  changes  in  the 
property  or  security  pledged  therefor,  and 
all  changes  in  rates  of  interest  charged 
for  the  loans;  also  to  approve  all  purchases 
or  sales  of  bonds,  stocks  and  notes  and  to 
bold  a meeting  at  least  once  in  each  month. 

It  is  also  provided  that  there  shall  be  an 
auditing  committee  who  shall  make  a 
thorough  audit  of  the  books,  securities  and 
cash  of  the  savings  bank  at  least  once  in 
each  year. 

Branches  Authorized. 

One  of  the  especially  important  changes 
is  the  permission  to  savings  banks  to  re- 
ceive deposits  at  places  other  than  their 
banking  houses.  This  means  the  author- 
ity to  establish  branches,  although  such 
branches  may  only  receive  deposits,  not 
make  payments.  It  is  sfnted  in  the  report 
of  the  committee  that  tnrre  are  226  towns 
in  Massachusetts  in  which  there  are  no 
savings  banks,  and  that  this  will  permit  a 
savings  bank  to  send  its  treasurer,  or  other 
representative,  to  neigh  coring  towns  or  to 
large  manufacturing  plants,  say  once  a 
week,  in  order  to  collect  deposits,  and  in 
this  way  encourage  thrift  and  make  it  as 
easy  as  possible  for  people  to  put  their 
money  into  savings  banks. 

Miscellaneous  Provisions. 

A provision  has  been  added  authorising 
banks,  in  the  case  of  lost  pass-books,  to 
issue  duplicate  books  after  a proper  period 
of  advertisement,  instead  of  requiring  the 
depositor  to  furnish  a bond  as  at  present. 

Members  of  boards  of  investment  or 
officers  charged  with  the  duty  of  invest- 
ing the  funds  of  a savings  bank  have  never 
been  allowed  to  borrow  individually  from 
their  bank,  but  the  new  law  prevents  them 
also  from  borrowing  for  a trust  estate  or 
property  of  which  they  are  trustee. 

The  amount  of  deposit  upon  which  the 
banks  may  allow  interest  has  been  raised 
from  $1,600  to  $2,000,  and  the  deposits  of 
labor  unions  and  sinking  funds  of  cities  and 
towns  in  Massachusetts  have  been  added 
to  the  list  of  deposits  which  shall  not  be 
bound  by  the  $2,000  limit. 

Extra  dividends  are  required  to  be  paid 
after  the  surplus  reaches  10  per  cent,  as 
heretofore,  but  will  be  smaller  in  amount 
and  presumably  more  frequent. 

Provisions  are  also  made  that,  if  necessary 
to  pay  its  depositors,  a savings  bank  may 
borrow  money. 

Investments. 

A number  of  important  changes  are  made 
in  the  investment  section,  as  follows; 

Loans  on  unimproved  and  unproductive 
real  estate  shall  not  exceed  40  per  cent 
of  the  value  of  such  real  estate. 


It  is  provided  that  the  board  of  invest- 
ment must  formally  revalue  all  properties 
upon  which  their  bank  holds  mortgages,  at 
least  once  in  five  years,  in  order  to  ascer- 
tain whether  they  have  depreciated  in  value. 

Water  districts  outside  of  Massachusetts 
must  have  at  least  5,000  inhabitants  in 
order  that  their  bonds  may  become  legal, 
and  bonds  of  cities  of  over  200,000  inhab- 
itants may  be  legal,  although  the  debt  is 
seven  per  cent,  of  the  valuation,  whereas 
in  smaller  cities  the  debt  may  be  only  five 
per  cent,  of  the  valuation. 

The  existing  law  legalizing  railroad  bonds 
consists  almost  entirely  of  serial  Vgisla- 
tion  in  which  certain  specific  railroads  are 
mentioned  by  name.  The  railroad  bond  law 
in  the  new  law  is  entirely  general  and  no 
railroads  whatever  are  mentioned  in  it.  It 
sets  certain  definite  standards,  and  the 
bonds  of  any  road  complying  with  them 
automatically  become  legal  for  investment. 
The  provisions  are  contained  in  three  para- 
graphs. 

(1)  Massachusetts  railroads; 

(2)  New  England  railroads; 

(3)  Other  railroads. 

The  standards  are  briefly  as  follows; 

For  Massachusetts  railroads,  the  bonds 
or  notes  issued  under  the  authority  of  the 
Commonwealth  of  a railroad  company  which 
has  paid  four  per  cent,  dividends  for  five 
years. 

For  New  England  railroads,  the  first 
mortgage  bonds  of  railroads  which  have 
paid  four  per  cent,  dividends  for  more  than 
five  years. 

For  other  railroads,  first  or  refunding 
mortgage  bonds  of  railroads  which  have 
paid  dividends  of  four  per  cent,  for  ten 
years,  provided  the  railroad  owns  500  miles 
of  railway,  or,  if  it  owns  less,  that  its  gross 
earnings  are  not  less  than  $15,000,000  a 
veiir. 

It  will  be  seen  that  the  provisions  relat- 
ing to  “other  railroads'*  are  more  strict 
that  those  of  “New  England  railroads/* 
and  that  those  of  “New  England  railroads 
are  more  strict  than  those  of  “Massachu- 
setts railroads.” 

In  drawing  the  section  providing  for  the 
legalizing  of  bonds  of  railroads  operating 
in  any  part  of  the  United  States,  a num- 
ber of  supplementary  provisions,  other 
than  those  mentioned  above,  have  been  in- 
serted to  make  it  certain  that  only  rail- 
roads of  the  highest  credit,  and  that  only 
the  best  bonds  which  they  issue,  can  com- 
ply with  the  new  standards.  The  bonds  of 
only  one  railroad  will  be  legalized  at  once 
by  * the  passage  of  the  law,  namely,  the 
Chicago,  St.  Paul,  Minneapolis  & Omaha, 
but  it  is  probable  that  three  others  will 
become  legal  under  its  provisions  before 
the  end  of  the  present  year,  namely. 
Central  Railroad  of  New  Jersey,  Chicago, 


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40 


THE  BANKERS  MAGAZINE. 


Milwaukee  & St.  Paul  railroad  and  Chicago, 
Rock  Island  & Pacific  railway. 

The  law  contains  a provision  that  the 
banks  may  continue  to  hold,  and  to  fur- 
ther invest  in,  any  issue  of  bonds  or  notes 
dated  prior  to  the  passage  of  the  bill  in 
which  they  were  then  authorized  to  invest. 

After  the  bill  had  been  reported  by  the 
committee,  it  was  amended  in  the  Senate  to 
permit  investment  in  the  collateral  trust 
four  and  one-half  per  cent,  bonds  of  1929 
of  the  American  Telephone  and  Telegraph 
Co. 

Deposits  in  National  Banks. 

The  amount  of  money  which  a savings 
bank  may  deposit  in  any  national  bank  or 
trust  company  has  been  reduced  from  five 
per  cent,  of  its  deposits  to  two  and  one- 
half  per  cent,  of  its  deposits,  but  in  no 
case  shall  such  a deposit  exceed  $500,000, 
nor  twenty-five  per  cent,  of  the  capital 
stock  and  surplus  of  the  depositary. 

Loans  on  Personal  Security. 

The  provision  relating  to  loans  on  per- 
sonal security  has  been  materially  changed 
to  conform  to  the  best  practice  in  the  sav- 
ings banks  at  the  present  time.  The  pres- 
ent law,  passed  in  1834,  permits  one-third 
of  the  assets  of  a savings  bank  to  be 
invested  in  loans  to  three  individuals — 
what  is  commonly  known  as  the  “three  name 
paper.”  The  bill  reduces  the  amount  which 
may  be  loaned  to  any  one  person  on  this 
form  of  note  from  five  per  cent,  of  the 
deposits  of  a savings  bank  to  one  per  cent, 
of  its  deposits  and  requires  that  all  three 
parties  to  the  notes  shall  be  responsible. 

Loans  to  Corporations. 

Loans  to  corporations  are  permitted  with 
one  substantial  surety  or  indorser,  pro- 
vided that  the  borrowing  corporation  has 
been  thoroughly  audited  by  an  accountant 
approved  by  the  bank  commissioner.  One- 
year  notes  of  Massachusetts  public  service 
corporations  which  have  been  proved  to 
have  a substantial  earning  capacity,  are 
permitted  without  surety,  as  are  also  one- 
year  notes  of  railroads  which  have  com- 
plied with  the  standards  set  under  the  rail- 
road bond  section,  and,  lastly,  notes  of  re- 
sponsible borrowers  with  a pledge  as  col- 
lateral of  approved  securities. 

Investment  in  Bank  Building. 

A sum  not  exceeding  the  guaranty  fund 
and  undivided  earnings  of  a savings  bank, 
instead  of  five  per  cent,  of  its  deposits, 
as  at  present,  may,  subject  to  the  approval 
of  the  Bank  Commissioner,  be  invested  in 
a bank  building. 

List  op  Securities  to  be  Published. 

On  the  first  day  of  February  in  each 
year  the  Bank  Commissioner  is  obliged  to 


prepare  and  publish  a list  of  all  rail- 
road and  street  railway  bonds  and  notes 
which  are  at  that  time  legal  investments 
for  Massachusetts  savings  banks. 


NEW  COUNTERFEIT  $10  NATION- 
AL BANK  NOTE. 

SERIES  of  1902,  issue  of  February  25, 
1903,  check  letter  M,  on  the  First  Na- 
tional Bank  of  the  City  of  New  York, 
Charter  No.  29,  portrait  of  McKinley;  J. 
W.  Lyons,  Register  of  the  Treasury;  Ellis 
H.  Roberts,  Treasurer.  The  sample  bears 
the  Treasury  No.  K54672  and  the 
bank  number  292842,  is  a poorly  exe- 
cuted photo-mechanical  production  on 
three  pieces  of  paper,  the  back  and  front 
being  printed  on  India  tissue  pasted  to  a 
heavy  middle  sheet  with  a few  silk  threads 
pasted  between  the  face  and  middle  sheet. 
The  title  under  the  portrait  reads  “WIL- 
LAM  McKINLEY,”  the  second  “I”  in  the 
first  name  having  been  omitted.  In  the 
descriptive  text  in  the  scroll  panel  left 
back  of  note,  the  word  “PAYMENT,”  at 
the  end  of  the  second  line,  appears  in  the 
counterfeit  “PAVMENT,”  and  in  the  scroll 
panel  right  back  of  note  the  first  word  in 
the  last  line  of  the  text  reads  in  the  coun- 
terfeit “EXCPTD,”  instead  of  “EXCEPT,” 
as  in  the  genuine.  The  lathe  work,  both 
face  and  back,  is  very  scratchy,  and  while 
the  general  appearance  of  the  note  is  de- 
ceptive it  should  attract  the  instant  atten- 
tion of  the  experienced  handler  of  money. 

Cashier  Frank  Pfeiffer  of  the  First  Na- 
tional Bank  of  Kemmerer,  Wyo.,  furnished 
the  first  sample  of  this  counterfeit. 


TRANSPORTATION  OF  FRAC- 
TIONAL SILVER  COIN. 

THE  Secretary  of  the  Treasury  has 
issued  a circular  letter  carrying  into 
effect  the  act  passed  by  the  last 
session  of  Congifess  regarding  the  trans- 
portation of  fractional  silver  coin. 

In  his  circular,  the  Secretary  says  that 
“such  fractional  silver  will  on  and  after 
July  1,  1908,  be  sent  by  registered  mail, 
at  the  risk  of  the  consignee,  in  packages 
of  $50,  registration  free,  from  the  most 
convenient  Treasury  office,  upon  the  de- 
posit of  an  equivalent  sum  in  United  States 
currency  or  national  bank  notes  with  the 
Treasurer,  or  any  assistant  treasurer,  or 
national  bank  depositary.  After  one-half 
of  the  appropriation  shall  have  been  used 
in  transporting  by  registered  mail,  frac- 
tional silver  coin  may  then  be  sent  at  the 
expense  of  the  Government,  either  by  ex- 
press or  registered  mail,  as  the  consignees 
may  request.” 


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MEXICO  AND  ITS  BANKING  FACILITIES. 

By  James  P.  Gardner. 


TXT’ITH  the  increase  of  trade  rela- 
* * tion ships  between  the  United 
States  and  Mexico  there  is  a growing 
demand  for  better  collection  facilities. 

The  clause  “with  exchange  and  col- 
lection charges/’  which  is  usually  in- 
serted in  drafts  for  collection  in  the 
United  States,  is  not  valid  in  Mexico, 
unless  the  buyer  signs  an  order  for  his 
purchases  with  that  clause  inserted  in 
the  contract.  In  such  cases  it  is  gen- 
erally understood  that  the  drawer  of 
the  draft  will  notify  the  collecting  bank 
of  snch  a contract  when  sending  drafts 
for  collection.  On  Mexico  City  items 
remittances  are  made  at  one-quarter  of 
one  per  cent.,  except  where  such 
clauses  are  inserted  in  the  drafts.  In 
these  cases  the  parties  drawn  on  usually 
insist  on  paying  the  face  of  the  draft 
in  American  money  or  New  York  ex- 
change. In  all  such  cases  charges  for 
Government  stamps  are  deducted  at  the 
rate  of  ten  cents  per  thousand,  which 
are  required  to  be  put  on  all  collections 
made,  to  the  extent  of  the  amount  of 


the  draft,  for  its  equivalent  in  Mexi- 
can money. 

Items  on  Vera  Cruz,  San  Luis  Po- 
tosi,  Ciudad  Porfirio  Diaz,  Orizaba 
and  Oaxaca,  are  generally  handled  on 
the  basis  of  one-quarter  of  one  per 
cent,  gold,  on  the  gold  value  of  the 
draft,  with  a minimum  charge  of  twen- 
ty-five cents  gold. 

Items  on  Monterrey,  Tampico,  Tor- 
reon,  Chihuahua,  Aguascalientes,  Gua- 
najuato, Guadalajara,  Puebla,  El 
Oro,  Paral,  Teziutlan,  Toluca  and 
Gomez  Palacio,  are  handled  on  a basis 
of  one-half  of  one  per  cent,  gold,  on 
the  gold  value  of  the  draft,  with  a 
minimum  charge  of  fifty  cents  gold. 

Items  on  Merida,  Campeche,  Progre- 
so, Morelia,  Mazatlan,  Saltillo,  and 
Silao,  arc  handled  on  a basis  of  three- 
quarters  of  one  per  cent,  gold,  on  the 
gold  value  of  the  draft,  with  a mini- 
mum charge  of  seventy-five  cents  gold. 

Care  should  be  taken  in  drawing  up 
drafts  on  Mexico  always  to  state  if 
payable  in  Mexican  or  in  United  States 
currency. 


INDORSEMENTS  IN  MEXICO. 


A CCORDING  to  Mexican  law 
^ checks  are  only  payable  to  the 
bearer  or  to  the  person  in  whose  favor 
they  are  drawn.  Prior  to  October, 
1906,  it  had  gradually  become  the  cus- 
tom to  endorse  checks,  thereby  convert- 
ing them  into  drafts,  in  view  of  which 
the  Treasury  Department  issued  a cir- 
cular insisting  on  strict  compliance 


with  the  law,  which  prohibits  an  en- 
dorsement of  any  kind  on  checks. 

Endorsable  documents  require  extra 
stamps,  and  are  usually  drawn  upon 
special  draft  forms;  the  two  forms  of 
check  and  draft  are  herewith  given. 

According  to  the  Mexican  stamp  law, 
checks  only  require  a five-cent  stamp 
for  any  amount  drawn  for,  but  an  en- 


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42 


THE  BANKERS  MAGAZINE. 


1.— Check  Form. 


dorsable  document,  or  draft,  requires 
stamps  at  the  rate  of  one  cent  for  every 
hundred  dollars  or  fraction  of  hundred 
dollars;  therefore,  although  a check  for 
$15,000  requires  only  a five-cent  stamp, 
a draft  for  said  amount  must  bear 
stamps  for  $1.50.  This  example  will 
explain  why  checks  are  not  endorsable 
from  one  party  to  another. 


TIMING  NOTES. 

'T'HE  question  of  the  maturity  of  a 
note  payable  “so  many  days  af- 
ter date/’  or  “so  many  months  after 
date,”  often  causes  confusion  where 
the  maturity  falls  on  the  last  day  of 
the  month.  For  example,  a note  dated 
June  80,  payable  one  month  after  date. 


will  fall  due  July  30.  An  exact  word- 
ing of  the  New  York  law  on  the  sub- 
ject is  given  below,  and  also  one  or  two 
typical  cases  which  will  serve  to  correct 
any  ambiguity: 

“A  number  of  months  after  or  be- 
fore a certain  day  shall  be  computed 
by  counting  such  number  of  calendar 
months  from  such  day,  exclusive  of  the 
calendar  month  in  which  such  day  oc- 
curs, and  shall  include  the  day  of  the 
month  in  last  month  so  counted,  having 
the  same  numerical  order  in  days  of 
the  month  as  the  day  from  which  the 
computation  is  made,  unless  there  be 
not  so  many  days  in  the  last  month  so 
counted,  in  which  case  the  period  com- 
puted shall  expire  with  the  last  day  of 
the  month  so  counted.” — (Extract  from 
Statutory  Construction  Act.) 


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§3  * M, 

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S3  s is, 

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v?  i 

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Htnitro  ftp  I on  & its  oiHp.vmi. 

ft  . jy///'d ' 

.Y/„  A’YjAa/  .//  ./A /’AAAAA/A  //'/a  AAAAfjt/Z/A^AfAf/fi f^AA  / A./Aa/  Z/aaA^A  aZ'  Zy//// //V 

AA  /ft  C/  f/r/f  s/f  / \^ 

Aa/  rs/fiAt///// /A  * y\ 

/ 'A  As  A At  A AAA  AA  A A .AAA/AA/A  s/rtfe' » 

. // . Asa//w  //s  //  /f/Z/Yj  //.  /Zr/r/A 


OH 


B125051 


GUANAJUATO. 


2.— Draft  Form. 


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PRACTICAL  BANKING. 


43 


A note  dated  January  31,  for  one 
month,  will  fall  due  on  February  28; 
note  dated  February  28,  for  one  month, 
will  fall  due  on  March  28;  note  dated 
June  30,  for  one  month,  will  fall  due 
on  July  30;  note  dated  April  30,  for 
one  month,  will  fall  due  on  May  31 
(May  30,  Decoration  Day). 


FLOOR  PLAN  OF  A WESTERN 
BANK. 

/^\NE  of  the  practical  matters  to  be 
settled  by  every  bank  is  the  ar- 
rangement of  the  floor  space  to  the  best 
advantage.  The  First  National  Bank 
of  Los  Angeles,  Cal.,  has  solved  the 
problem,  as  shown  in  the  accompany- 
ing illustration: 


E.  S.  Pauly,  Assistant  Cashier,  (Notes  and 
Escrows),  Window  No.  29. 

E.  W.  Coe,  Assistant  Cashier,  (Money 
Transferred  by  Telegraph),  Window  No.  13. 

A.  B.  Jones,  Assistant  Cashier,  Collection 
and  Transit  Departments. 

DEPARTMENTS. 

Credit  Department,  W.  N.  Hamaker,  Win- 
dow No.  32. 

Chief  Teller,  D.  W.  Carlton,  Window  No. 

Auditor,  W.  H.  Lutz,  Window  No.  9. 
Purchases  and  Supplies,  W.  C.  Bryan, 
Room  22,  Rear  Lobby. 

PAYING  AND  RECEIVING  DEPARTMENT. 
A-B.. Window  No.  1 L-M.. Window  No.  5 

C-D.. Window  No.  2 N-R.. Window  No.  6 

E-G.. Window  No.  3 S ..Window  No.  7 

H-K.  .Window  No.  4 T-Z.. Window  No.  8 

Special  Department  for  Women,  Window 
No.  16. 

NOTE  AND  ESCROW  DEPARTMENT. 
Note  Clerks,  Windows  Nos.  30  and  31. 

EXCHANGE  DEPARTMENT. 

Drafts,  Certificates  of  Deposits  and  Cash- 
iers’ Checks,  Window  No.  12. 

COLLECTION  DEPARTMENT. 
Collections  (Outgoing)  on  Outside  Points, 
Window  No.  17. 


It  prints  this  plan  on  a card,  on  the 
3ther  side  of  which  is  the  following 
information: 

Directory 

First  , National  Bank  of  Los  Angeles. 

OFFICERS. 

President— J.  M.  Elliott. 

Vice-Presidents — Stoddard  Jess,  W.  C. 
Patterson,  G.  E-  Bittinger,  John  S.  Cravens. 
Cashier— W.  T.  S.  Hammond. 

Assistant  Cashiers— A.  C.  Way,  E.  S. 
Pauly.  E.  W.  Coe.  A.  B.  Jones. 

Bureau  of  Information,  Centre  of  Main 
Lobby. 

Xpw  Accounts  Opened.  Window  No.  10. 
W.  T.  S.  Hammond,  Cashier,  Window  No. 
15. 

A.  C.  Way.  Assistant  Cashier,  (Letters  of 
Credit),  Window  No.  14. 


Collections  (Incoming)  on  Los  Angeles, 
Window  No.  18. 

Collections  on  Notes  for  Customers,  Win- 
dow No.  19. 

PASS  BOOK  AND  STATEMENT  DEPART- 
MENT. 

Pass  Books  Balanced  and  Statements  of 
Accounts  Rendered,  W'indow  No.  20,  Rear 
Lobby. 

A SHORT  CUT  TO  SAN  SALVA- 
DOR. 

LL  letters  and  registered  articles 
destined  for  Salvador  and  not 
addressed  for  despatch  by  some  other 
route  are  now  being  forwarded  to  New 


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THE  BANKERS  MAGAZINE. 


Form  A. 


To  be  Mobminnltdl  bf  the  London  Agent’s  DtelutHte  on  Verm  B 

a ted  far  payment 


Income  Tax. 
FOREIGN  DIVIDENDS. 


DECLARATION  to  be  made  abroad  by  an  OWNER  of 
Foreign  Bonds  claiming  exemption  from  Income  Tax. 


I Name,  address, 
ooonpaiion  of 
Owner  of  the  Bonds 
to  be  plainly  written 


1,0- 


of 


(■}  The  amount  of 
Coupons  to  be  set 
oat  in  writing  before 
the  Declaration  is 
signed. 

(*)  Name  and  ad- 
dress 16  be  folly 
given. 


by  occupation  

do  hereby  solemnly  declare  that  the  Coupons,  amounting  to  £_ 
Bay  (*)_ 


as  specified  at  the  back  hereof,  have  been  detached  from  Bonds  which  are  my 
own  absolute  property,  and  which  Bonds  are  in  the  possession  of  (*) 


and  that  no  British  Subject  wherever  residing,  or  Foreigner  residing  in  the  United 
Kingdom  of  Great  Britain  and  Ireland,  has  any  interest  whatever  in  the  said  Bands 
or  Coupons. 

Signature  of  the  Owner  \ 

of  the  Bonds  ) ' 

Date 


Declared  at. 


this day  of 


190  . 


Before  me, 


Signature. 


Designation. 

Seal  of  British  Consul, 
or  Vice-Consul 


Seal  of  Notary  Pubtio. 

N.B. — This  Declaration  when  filled  up,  must  only  be  made  before  a Notary  Public  in 
case  there  is  no  British  Consul  or  Vice-Consul  in  the  place  where  the  Declarant 
resides.  The  Bonds,  if  required , must  be  produced  ih  support  of  this  claim. 


If*£°p0to  “n  ^ Where  Coupons  are  transmitted  through  a Foreign  Banker  or 
K^om  ‘hbyDnu£  Merchant  residing  abroad,  on  behalf  of  his  Foreign  Clients, 
thTD^ion^d  the  following  Declaration  must  be  signed 

noi  be  ugoed.  j tlia-t  the  above  named 

is  one  of  iny  clients,  and  that  the  Coupons  specified  at  the  back  hereof  have  this  day 

been  transmitted  by  me  for  payment  on  his  behalf  to  Messrs. 

of 


Signature  of  Foreign 
Banker  or  Merchant  j 

Address 


Bsaoo-possi/soooya/oe  a 


Date 


Forms  for  securing  rebate  on  English  income  tax.  No.  1. 


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PRACTICAL  BANKING. 


45 


Orleans  for  despatch  via  Puerto  Bar- 
rios and  Zacapa,  as  the  articles  reach 
their  destinations  earlier  by  that  route 
than  via  the  Colon  and  Panama  route. 
Printed  matter,  etc.,  and  registered 
and  ordinary  parcels,  post  packages, 
cannot  be  forwarded  via  Puerto  Bar- 
rios and  Zacapa,  and  they  are  there- 
fore forwarded  exclusively  by  the 
Colon  and  Panama  route. 

The  Salvador  mail  for  despatch  via 
New  Orleans,  Puerto  Barrios  and 
Zacapa  closes  at  the  New  York  post- 
office  at  10.30  P.  M.  every  Monday. 
(Registered  mail,  6.00  P.  M.  the  pre- 
vious day.) 


Banks  and  merchants  corresponding 
with  San  Salvador  can  save  consider- 
able time  by  following  this  suggestion. 


THE  BRITISH  INCOME  TAX. 

/^JWNERS  of  coupons  payable  in 
Great  Britain,  who  are  not 
British  subjects,  frequently  experience 
annoyance  by  reason  of  the  heavy  de- 
duction made  by  British  banks  to  com- 
ply with  the  laws  of  Great  Britain  on 
the  income  tax.  It  is,  however,  possi- 
ble for  citizens  of  the  United  States 
owning  bonds,  coupons  of  which  are 


SCHEDULE  OF  BONDS  AND  COUPONS. 


Registered, 


Somerset  House , 


Date. 


Forms  for  securing  rebate  on  English  income  tax. 


No.  1.— Reverse. 


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46 


THE  BANKERS  MAGAZINE. 


Form  A 1. 


Income  Tax. 


FOREIGN  DIVIDENDS. 


This  Bpajgggf  to  be  filled  np. 

Order » 

Mo.  i 


H — Allowed  for 

« $.  d. 

I I I to 


A FF1DA  VIT  [or  Affirmation]  to  be  made  abroad  by  the 
Owner  of  the  Bonds  claiming  repayment  of  Income  Tax. 


1.  Nam#,  address,  Ay  V 

and  occupation  of 
Owner  of  the  Bonds 
to  bs  plainly  written,  of 


do  hereby  make  Oath  [or  Affirmation]2  and  declare  that  the  Coupons,  amounting  to 

2.  Affirmation  per- 
missible only  to  per  f , 

sons  having  no  relig-  x ®*y — — — 

ions  belief  or  to  whom 

ja  ° contrary1  to°  Zeir  as  specified  at  the  back  hereof,  were  detached  from  Bonds,  which  at  the  time  the 

religious  belief. 

3.  The  amount  of  , _ . . . , . , , . , 

Coupons  to  be  set  Interest  on  such  Bonds  was  paid  were  together  with  the  said  coupons  my  property, 
out  in  writing. 

and  did  not  belong  either  directly  or  indirectly  to  any  British  Subject  wherever  residing. 


or  Foreigner  residing  in  the  United  Kingdom  of  Great  Britain  and  Ireland. 


Signature  of  the  Owner, 
Date, 


Sworn  (or  Affirmed)  at. 


this day  of 190 

before  me 


-Signature. 


• Here  state  whe- 
ther Consul,  Vice- 
Consul.  or  Notary 
Public. 


N B. — Affidavits  or 
Affirmations  to  be 
mo-le  only  beforo 
a Notary  'Public  In 
places  where  there  is 
no  resident  British 
Consul  or  Vic<--Con- 
sul. 


Presented  by. 


Designation. 


Seal  of  Consul 
Vice-Consul,  or 
Notary  Public. 


, Agents  in 


R ft  * Co— 4930  ViOQO- 9-06/9000- 1-C7  «9» 


Forms  for  securing 


rebate  on  English  income  tax.  No.  2.— 

' Digitized  by 


Google 


PRACTICAL  BANKING. 


47 


payable  abroad,  to  obtain  a refund, 
claiming  exemption  from  the  tax,  or 
the  tax  having  been  deducted  on  former 
coupons,  to  obtain  repayment  of  the 
tax,  by  use  of  blanks  similar  to  those 
below,  which  are  the  proper  forms  to 
use,  and  may  be  obtained  readily. 


THE  QUESTION  OF  PROTEST  AS 
VIEWED  BY  THE  FOREIGN 
BANKER. 

T N the  United  States  “no  protest” 
**■  means  what  is  implied,  and  in  the 
absence  of  such  instructions  it  is  gen- 


erally understood  that  items  not  so 
noted  are  to  be  protested.  Our  friends 
abroad,  however,  take  a different  view 
of  the  case. 

Thus,  in  France  it  is  the  custom  to 
mark  items  which  they  distinctly  wish 
protested  “Simple  Protet,”  which  im- 
plies forcibly  that  such  an  item  is  to 
be  protected. 

Again,  it  is  a common  custom  in 
France  to  endorse  items  “sans  compte 
de  retour,”  which  naturally  would  be 
translated,  “return  without  charge/'  or 
protest;  but  not  so,  for  these  instruc- 
tions mean  merely  that  no  charges  are 


SCHEDULE  OP  BONDS  AND  COUPONS. 


Description  of  Bonds 
aud  when  , 

Coupons  were  due 

i 

NUMBERS  OP  COUPONS 
to  be  entered  in  consecutive  order 

Total  Amount  of 
Coupons  of  each 
description  of  Bond 

In  corn  o Tax 
deducted 

a 

nr 

U 

i. 

d. 

Total  Number 

^ * 

i 

Total  Amount  of  Income  Tax...£ 

H 

i 

■ 

I hereby  claim  repaymentof  the  sum  of  £ deducted  as  Income 

mwt  beTc^p^ed  Tax  from  the  above  Coupons  and  I authorize..., 

S.  of to  receive  tbe  aame  on  my behalf- 

tbe  Interest  and 

deducted  tbe  Income  Signature  of  Owner  of  Bond, 


1 hereby  request  that  repayment  may  be  made  to  me  of  the  above-named  sum  of. 

on  behalf  of 

Signature, 

A.dclress. 

' Date,  

Registered, 


/ Somerset  House , 

. Date 

Forms  for  securing  rebate  on  English  income  tax.  No.  2.— Reverse. 


Digitized  by  c.ooQle 


48 


THE  BANKERS  MAGAZINE. 


to  be  made  for  the  presentation  or  the 
return  of  the  item,  but  not  that  protest 
has  been  waived. 

In  Holland,  on  the  other  hand,  while 
it  is  also  their  custom  to  endorse  their 
collection  drafts  “no  charges,"  differ- 
ing from  the  French,  they  mean  by  this,, 
“no  protest." 

In  Germany,  also  as  in  Holland, 
“ohne  Kosten"  means  “no  charges," 
the  equivalent  of  our  “no  protest." 
Banks  handling  the  collection  business 
of  Continental  banks  will  avoid  much 
confusion  and  possible  expense  by 
watching  this  simple  point,  very  insig- 
nificant apparently,  and  yet  if  over- 
looked, charged  with  consequences  so 
momentous. 


WHAT’S  IN  A NAME? 

rT'HE  form  given  herewith,  used  by 
one  of  the  large  London  banks 
for  the  presentation  of  its  drafts  and 
notes,  brings  to  notice  the*  distinction 
recognized  abroad  between  a draft  and 
a “bill": 

A Bill  for  X 
Drawn  by 
Upon  Mr. 

Lies  due  at  the  Union  of  London  & 
Smiths  Bank,  Ltd., 

No.  2,  Princes  Street,  Mansion  House. 

No  Drafts  will  be  received  in  pay- 
ment of  Bills,  except  upon  Bankers 
eastward  of  St.  Paul's  who  clear.  Such 
Drafts  must  be  brought  before  Three 
o'clock,  and  will  be  sent  to  the  Bankers 
attached  to  the  Bill. 

N.  B. — Please  to  call  between  Two 
and  Four  o'clock. 

Light  gold  cannot  be  received  in 
payment. 

On  Saturdays  please  call  between 
Eleven  and  One  o'clock. 

With  bankers  in  the  United  States 
this  notice  in  all  probability  would  have 
read:  “No  checks  will  be  received  in 

payment  of  drafts,"  etc.,  but  with  our 
English  cousins  a check  is  a draft,  and 
a draft  is  a bill. 


THE  NATIONAL  DRINK  ACCOUNT. 

ACCORDING  to  the  “American  Grocer,” 
our  national  drink  bill  is  mounting 
up.  This  publication  says: 

Bringing  together  the  quantities  of  liquors 
consumed,  estimated  at  the  retail  cost,  on 
the  basis  of  previous  reports,  the  American 
people  spent  for  alcoholic  stimulants  for  the 
year  ending  June  30,  1907: 

Beer  $843,333,829 

Whiskey  (exclusive  of  quantity 

used  in  arts)  604,794,407 

Wines  118.456.091 


Grand  total  1907,  est.  cost  $1,466,584,327 

Grand  total  1906,  est.  cost 1,450,855,448 

Grand  total  1905,  est.  cost 1,325,439.074 

Grand  total  1904,  est.  cost 1,277,727,190 

The  total  revenue  of  the  United  States 
Government  in  1907  from  spirituous  and 
malt  liquors  and  from  tobacco  was  $247,- 
468.911,  or  $2.88  per  capita,  equal  to  $14.40 
tax  on  every  family. 

We  must  leave  to  students  of  social  econ- 
omy the  question  of  a great  nation  spending 
an  average  of  over  one  and  one-half  bllliong 
annually  for  stimulating  beverages;  a sum 
about  as  great  as  the  appropriations  of  thq 
Congress  for  a session.  Nearly  double  as 
much  per  capita  is  spent  for  drink  as  is  spent 
for  the  maintenance  of  public  schools.  It 
nearly  equals  the  value  of  exports  of  mer- 
chandise per  capita.  It  Is  double  the  amount 
of  the  public  debt  It  is  more  than,  the  fajm 
value  of  the  corn  crop,  which  exceeds  2,500.- 
000.000  bushels;  three  times  the  value  of  the 
wheat  grown;  more  thai\  double  the  worth  of 
the  cotton  crop.  The  Indirect  cost  is  beyond 
estimate,  and  so  great  is  the  waste  and 
misery  created  that  states  are  fighting  the 
evil  and  endeavoring  to  banish  the  saloon 
as  a distributing  factor.  It  is  easily  the 
foremost  question  of  the  day,  and  places 
the  support  of  a big  navy  or  an  army  in  the 
shade. 


NEW  COUNTERFEIT  $5  NATION- 
AL BANK  NOTE. 

CHECK  letter  “C;”  J.  Fount  Tillman, 
Register  of  the  Treasury;  Ellis  H. 
Roberts,  Treasurer  of  the  United 
States;  Charter  No.  5082;  Treasury  No. 
R497013R ; Bank  No.  5825.  The  bill  is  a 
direct  photograph  with  coloring  matter  ap- 
plied to  the  numbers  and  geographical  let- 
ter “M.”  The  original  charter  number  can 
be  discerned  under  the  coloring.  The  coun- 
terfeit at  hand  bears  the  back  impression  of 
the  $5  note  of  the  State  National  Bank  of 
St.  Louis,  as  the  charter  number  of  that 
bank,  5172,  appears  in  the  panel  in  the 
center  of  the  note.  No  attempt  has  been 
made  to  disguise  the  fact  that  the  back  is 
a photograph.  There  is  no  silk  or  imitation 
of  it  in  the  paper. 

The  fact  that  the  back  of  this  note  is 
a counterfeit  of  the  back  of  the  State  Na- 
tional Bank  note  would  seem  to  indicate 
that  the  State  National  Bank  $5  note  was 
counterfeited  as  well  as  that  of  the  National 
Exchange  Bank  of  Springfield. 


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BANKING  AND  COMMERCIAL 


Conducted  by  John  J.  Crawford,  Esq., 
Author  Uniform  Negotiable  Instruments  Act. 


IMPORTANT  LEGAL  DECISIONS  OF  INTEREST 

TO  BANKERS. 


All  the  latest  decisions  affecting  bankers  rendered  by  the  United  States  courts  and  State  courts 
of  last  resort  will  be  found  in  the  Magazine**  Law  Department  as  early  as  obtainable. 

Attention  is  also  directed  to  the  “Replies  to  Law  and  Banking  Questions."  included  in 
this  Department. 


KNOWLEDGE  OF  OFFICER  AND 
DIRECTOR— WHEN  BANK  NOT 
CHARGEABLE  WITH . 

LANNING  vs.  JOHNSON  et  al. 

SUPREME  COURT  OF  NEW  JERSEY,  APRIL 

2,  1908. 

The  president  and  director  of  a trust 
company,  who  was  also  a director  of  a bank, 
induced  other  directors  of  the  bank  to 
execute  a note,  on  the  pretense  that  the 
bank  was  temporarily  in  need  of  funds,  and 
on  the  condition  that  the  note  was  not  to 
be  discounted  until  the  signatures  of  the 
other  directors  of  the  bank  had  been  se- 
cured ; but,  without  procuring  the  additional 
signatures,  and  without  consulting  with  the 
other  directors  of  the  trust  company,  he 
caused  the  note  to  be  discounted  by  the 
trust  company:  Held , that  the  trust  com- 
pany was  not  bound  by  his  knowledge,  and 
was  entitled  to  recover  on  the  note. 

T'HE  plaintiff  sued  as  the  receiver 
*■*  of  the  Monmouth  Trust  & Safe 
Deposit  Company  to  recover  the 
amount  due  upon  a certain  promissory 
note  for  $10,000  held  by  the  insolvent 
company,  and  signed  hv  the  defendant. 
The  note  was  made  at  the  instance  of 
one  Twining,  who  was  a co-director 
with  the  makers  of  the  note  of  the 
First  National  Bank  of  Asbury  Park, 
and  also  president  and  a director  of 
the  trust  company.  Twining  obtained 
the  signatures  of  the  defendants  to  the 
note  upon  the  pretense  that  the  bank 
4 


was  temporarily  in  need  of  funds  to 
carry  it  over  until  it  received  returns 
from  its  discounts  in  other  banks,  and 
upon  the  express  condition  and  agree- 
ment with  the  defendants  that  the  note 
was  not  to  be  discounted,  or  used  un- 
less, and  until  the  signatures  of  the 
other  directors  of  the  bank,  some  five 
in  number,  were  procured  and  attached 
to  the  note.  But  notwithstanding  his 
agreement  with  the  defendants,  Twin- 
ing caused  the  note  to  be  discounted 
by  the  trust  company  without  the  addi- 
tional signatures  of  the  remaining  di- 
rectors. This  was  done  by  Twining  as 
president  of  the  company  without  con- 
sultation with  his  board  of  directors; 
and  the  right  to  do  so  had  not  been 
conferred  upon  him  by  the  board, 
either  expressly  or  by  knowingly  per- 
mitting him  to  exercise  a like  power  on 
previous  occasions,  or  by  ratifying  or 
acquiescing  in  its  exercise  by  him.  On 
these  facts  the  trial  court  found  in 
favor  of  the  plaintiff. 

Gummere,  C.  J.:  It  is  contended  on 
behalf  of  the  defendant  that  the  con- 
duct of  Twining  in  procuring  the  note 
to  be  discounted  without  first  obtaining 
the  signatures  of  the  other  directors  of 
the  bank  was  a fraud  upon  the  defend- 
ant; that  the  knowledge  of  Twining  of 
the  fact  that  the  note  was  fraudulently 
being  put  into  circulation  was  attribut- 


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49 

Google 


50 


THE  BANKERS  MAGAZINE. 


able  to  the  trust  company  because  of 
the  fact  that  he  acted  for  it  in  the  mat- 
ter of  the  discount;  and  that,  there- 
fore, the  makers  of  the  note  are  not 
liable  to  the  receiver.  That  the  fraud 
of  Twining  in  presenting  the  note  for 
discount  without  procuring  the  signa- 
tures of  all  the  directors  of  the  bank 
renders  it  void,  if  the  trust  company 
took  it  with  notice  of  the  fraud,  is  con- 
ceded. The  only  question  is  whether 
his  knowledge  is  attributable  to  the 
trust  company. 

It  has  frequently  been  declared  in 
other  jurisdictions  that  there  is  a dis- 
tinction between  knowledge  of  illegal- 
ity, or  want  of  consideration  of  a note 
by  a director  who  acts  with  his  board 
in  discounting  it  and  such  knowledge 
on  che  part  of  a director  who  is  not 
present  and  acting  with  the  board  when 
the  discount  is  made;  and  that  in  the 
former  case  the  bank  is  bound  bv  his 
knowledge,  and  in  the  latter  case  it  is 
not.  Many  of  the  cases  so  holding  will 
be  found  collected  in  the  opinion  of 
Depue,  J.,  in  First  National  Bank  of 
Hightstown  vs.  Christopher,  40  N.  J. 
Law,  435.  It  is  upon  the  principle 
which  is  considered  to  underlie  this  dis- 
tinction that  the  defendants  rest  their 
claim  of  non-liability.  But  the  dis- 
tinction claimed  to  exist  has  been  con- 
demned, as  we  understand  the  opinions 
hereafter  referred  to,  by  our  Court  of 
Errors  and  Appeals.  In  the  case  of 
Sooy  vs.  State,  41  N.  J.  Law,  394,  the 
sureties  upon  the  bond  of  a state 
Treasurer  sought  to  escape  liability  for 
his  defalcations  upon  the  ground  that 
the  Legislature  had  knowledge,  at  the 
time  of  the  execution  and  delivery  of 
the  bond,  that  the  Treasurer  was  then 
a defaulter,  and  that  it  had  failed  to 
communicate  this  fact  to  the  sureties. 
Such  knowledge  on  the  part  of  the 
Legislature  "was  attempted  to  be  shown 
by  proving  that  the  fact  had  been  com- 
municated to  one  of  the  members  of 
that  body.  It  was  decided  that,  “in  a 
matter  wherein  the  Legislature  proper- 
ly acts  as  an  agent  of  the  state,  notice 
to  members  of  the  Legislature  individ- 
ually is  not  notice  to  the  state.  Such 
notice,  to  bind  the  state,  must  be  given 


to  one  of  the  legislative  branches  in 
organized  session." 

The  underlying  rule  upon  which  this 
decision  was  rested  is  stated  in  the 
opinion  to  be  that  the  knowledge  of 
the  agent  is  chargeable  upon  the  prin- 
cipal only  when  the  principal,  if  act- 
ing for  himself,  would  have  received 
notice  of  the  matters  known  to  the 
agent.  In  the  late  case  of  Vulcan  De- 
tinning  Co.  vs.  American  Can  Co.  (N. 
J.  Err.  & App.)  67  Atl.  889,  the  same 
court  affirmed  the  rule  laid  down  in 
Sooy  vs.  State,  and  held  that  the  de- 
fendant company  was  chargeable  with 
knowledge  of  facts  acquired  by  its 
president  while  a director  of  the  com- 
plainant company  only  so  far  as  it 
would  itself  have  acquired  such  knowl- 
edge by  dealing  directly,  or  through 
another  agent,  with  the  complainant 
company  concerning  the  subject-matter 
of  the  controversy.  At  the  same  time 
it  expressly  repudiated  the  doctrine 
laid  down  by  us  in  the  earlier  case  of 
Willard  vs.  Denise,  50  N.  J.  Eq.  482, 
viz.,  that  where  information  is  casually 
obtained  by  an  agent  of  a corporation, 
and  the  corporation  afterward  acts 
through  such  agent  in  a matter  where 
the  information  possessed  by  him  is 
-pertinent,  the  knowledge  of  the  agent 
will  be  imputed  to  the  principal. 

On  the  strength  of  those  two  cases, 
therefore,  it  would  seem  that,  if  the 
note  in  controversy  had  been  discount- 
ed by  the  board  of  directors  of  the 
Trust  Company  while  Twining  was 
present  as  a member  thereof,  the  trust 
company  would  not  be  chargeable  with 
notice  of  his  fraudulent  conduct  in 
procuring  its  discount.  But  the  fact 
that  the  note  was  discounted,  not  by 
the  board  of  directors,  but  by  Twining 
himself,  he  taking  advantage  of  his 
position  as  president  to  usurp  the  func- 
tion of  the  board  without  authority 
from  them,  makes  it  unnecessary  to 
determine  the  question  discussed;  for  it 
can  hardly  be  held  that,  where  a trans- 
action takes  place  without  either  the 
knowledge  or  authority  of  the  board, 
the  board  is  chargeable  with  notice  of 
facts  known  to  their  self-constituted 


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BANKING  LAW. 


51 


agent,  bat  not  communicated  by  him  to 
them. 

The  rule  to  show  cause  will  be  dis- 
charged. 


PARTNERSHIP  NOTE  — IN- 
DORSEMENT BY  PARTNER. 

NATIONAL  EXCHANGE  BANK  OF 
PROVIDENCE  vs.  LUBRANO. 

SUPREME  COURT  OF  RHODE  ISLAND, 
MARCH  4,  1908. 

Under  the  Negotiable.  Instruments  Law  a 
partner  who  indorses  a note  made  by  the 
firm  adds  to  his  liability  as  maker  a several 
and  distinct  liability  as  indorser. 

r I %HIS  was  an  action  upon  a prom- 
issorv  note  in  the  following 
form:  “$400.00.  Providence,  R.  I., 

Oct.  95,  1905.  Ninety  days  after  date 
we  promise  to  pay  to  the  order  of  the 
National  Exchange  Bank  four  hun- 
dred 00-100  dollars  at  the  National 
Exchange  Bank  of  Providence.  Value 

received.  No. . Due  Jan.  23. 

D.  Di  Luglio  Co.”  Indorsed  on  back 
of  note:  “Michael  Lubrano.” 

Parkhuhst,  J.  (omitting  part  of  the 
opinion) : The  declaration  shows  that 

the  defendant,  Lubrano,  was  a maker 
of  the  note  as  a partner  with  one  D.  Di 
Lnglio,  under  the  firm  name  of  “D.  Di 
Luglio  Company,”  as  signed  on  the 
note.  If  Lubrano  had  placed  his  name 
upon  the  back  of  the  note  before  deliv- 
ery, under  the  law  of  this  state,  as  it 
existed  prior  to  the  passage  of  the 
“Negotiable  Instruments  Act”  (chapter 
674,  p.  222,  Jan.,  1899),  he  would 
simply  have  become  a joint  maker  of 
the  note.  As  he  was  a maker  already, 
his  relation  to  the  note  would  not  have 
been  changed,  and  his  liability  there- 
nnder  would  neither  have  increased  nor 
diminished.  His  act  would  simply 
have  been  nugatory.  Under  the  nego- 
tiable instruments  act,  however,  we 
think  be  may  fairly  be  held  to  have 
made  himself  an  indorser  under  the 
provisions  of  section  71,  viz.:  “A  per- 

son placing  his  signature  upon  an  in- 
strument otherwise  than  as  maker, 
drawer,  or  acceptor  is  deemed  to  be  an 
indorser,  unless  he  clearly  indicates  by 


appropriate  words  his  intention  to  be 
bound  in  some  other  capacity/'  (See, 
also,  Negotiable  Instruments  Act,  p. 
228,  c.  674,  § 25,  cl.  6.  See  McLean 
vs.  Bryer,  24  R.  I.  599;  Downey  vs. 
O'Keefe,  26  R.  I.  571 ; Deahv  vs.  Cho- 
quet,  28  R.  I.  338,  67  Atl.  421.)  In 
other  words,  we  are  of  the  opinion  that 
the  defendant,  by  so  indorsing  said 
note,  added  to  his  liability  as  maker 
a several  and  distinct  liability  as  in- 
dorser, thereby  making  himself  indi- 
vidually liable  for  the  payment  of  the 
note,  after  due  notice  of  dishonor,  and 
thereby  also  guaranteeing  the  signa- 
ture on  the  face  of  the  note,  and  that 
the  plaintiff  had  a right,  if  it  saw  fit, 
to  sue  him  as  such  indorser,  as  it  has 
done.  The  demurrer  to  the  declaration 
was  therefore  properly  overruled. 


CHECK— TIME  FOR  GIVING  NO- 
TICE OF  DISHONOR. 

JURGENS  vs.  WICHMANN. 


NEW  YORK  SUPREME  COURT,  APPELLATE 
DIVISION,  SECOND  DEPARTMENT, 
FEBRUARY  28,  1908. 

The  holder  of  a cheek  indorsed  and  de- 
posited the  same  in  his  bank  for  collection 
on  July  28.  On  July  29  he  was  notified 
by  the  bank  that  the  check  had  been  dis- 
honored, and,  on  July  30,  he  notified  the 
payee  by  telegraph:  Held,  That  the  notice 
was  in  due  time  under  section  178  of  the 
Negotiable  Instruments  Law. 

'T'HIS  was  an  action  by  the  holder 
A of  a check  against  the  maker 
and  payee.  The  former  did  not  an- 
swer. The  latter  appealed. 

Gaynor,  J . (omitting  part  of  the 
opinion)  : The  point  is  also  made  that 
notice  of  dishonor  was  not  given  to 
the  appellant  in  time.  The  evidence 
is  that  the  plaintiff  endorsed  and  de- 
posited the  check  in  his  bank  for  col- 
lection on  July  28th,  and  that  he  noti- 
fied the  appellant  by  telegraph  on  July 
30th  of  its  dishonor.  The  evidence  is 
that  this  was  done  immediately  after 
the  plaintiff  had  received  notice  of  such 
dishonor  from  his  bank.  By  sections 
174  and  175  of  the  negotiable  instru- 


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THE  BANKERS  MAGAZINE. 


ments  law  (Laws  1897,  p.  741,  c.  612) 
the  plaintiff's  bank  had  until  the  day 
following  the  dishonor  to  give  him  no- 
tice, which  would  be  July  29th,  and  by 
section  178  the  plaintiff  had  until  the 
day  following  notice  to  him  to  give  the 
appellant  notice. 

The  judgment  should  be  affirmed. 


PROMISSORY  NOTE  — WHEN 
BANK  HOLDER  IN  DUE 
COURSE  — INDORSEMENT 
WITHOUT  RECOURSE . 

ELGIN  CITY  BANKING  COMPANY 
vs.  HALL. 

SUPREME  COURT  OP  TENNESSEE,  OCT.  19; 

1908. 

Under  the  Negotiable  Instruments  Law, 
an  indorsement  “without  recourse”  does 
not  impair  the  negotiable  character  of  a 
note,  or  put  the  transferee  on  notice. 

A bank  is  not  deemed  a holder  for  value 
where  it  has  done  nothing  more  than  dis- 
count the  paper  and  place  the  proceeds  to 
the  credit  of  its  customer. 

But  if  the  bank  discounting  the  paper  ob- 
tains credit  for  its  customer  with  another 
bank  for  the  amount  of  the  proceeds  the 
obligation  so  created  will  constitute  the 
discounting  bank  a holder  for  value. 

'T'HIS  was  an  action  against  the 
makers  of  a promissory  note 
which  had  been  given  in  part 
payment  for  a horse.  The  defence 
was  that  the  note  was  procured  by 
fraud  and  misrepresentation  on  the 
part  of  the  payees. 

McAllister,  J.  (omitting  part  of 
the  opinion) : We  think,  upon  the  facts 
shown  in  the  evidence,  that  this  con- 
tract and  these  notes  were  not  enforce- 
able against  the  original  makers,  on 
account  of  the  fraud  and  misrepresen- 
tation practiced  by  the  agent  of  the 
payees,  Dunham,  Fletcher  & Coleman. 

The  question  remains  whether  the 
complainants  were  innocent  purchas- 
ers of  said  note  for  value,  before  ma- 
turity, in  due  course  of  trade,  with- 
out notice  of  any  of  the  infirmities  in 
said  notes. 

As  already  seen,  said  notes  were  first 
indorsed  "without  recourse"  by  Dun- 
ham, Fletcher  & Coleman,  the  payees, 
to  W.  S.,  J.  B.  & B.  Dunham,  and  said 


notes  were  then  delivered  to  complain- 
ant bank  by  said  W.  S.,  J.  B.  & B. 
Dunham  under  a written  guaranty  on 
the  back  of  the  notes,  by  which  said  firm 
guaranteed  the  payment  of  said  note, 
with  interest  at  5*/2  per  cent,  per  an- 
num, together  with  all  the  costs  and 
expenses  of  collection,  and  also  waived 
demand  and  notice  of  non-payment. 

It  is  suggested  that  the  indorse- 
ment "without  recourse"  was  sufficient 
to  put  the  purchaser  upon  notice,  and 
destroyed  the  negotiability  of  the  in- 
strument; but  we  think  it  is  well  settled 
that  an  indorsement  without  recourse  is 
not  sufficient  to  put  the  purchaser  upon 
notice.  2 Randolph,  Commercial  Pa- 
per, § 1008;  7 Cyc.  954,  and  numerous 
cases  cited. 

Moreover,  the  matter  is  set  at  rest 
by  our  negotiable  instrument  law  (Acts 
1899,  p.  148,  c.  94,  § 38),  wherein  it  is 
provided  that  "such  an  indorsement 
does  not  impair  the  negotiable  charac- 
ter of  the  instrument." 

******* 

The  determinative  question  present- 
ed on  the  records  is  whether  the  com- 
plainant bank  is  a holder  for  value. 
Our  negotiable  instrument  law  (section 
25)  provides: 

"Value  is  any  consideration  suffi- 
cient to  support  a simple  contract.  An 
antecedent  or  pre-existing  debt  con- 
stitutes value,  and  is  deemed  such 
whether  the  instrument  is  payable  on 
demand,  or  at  a future  time." 

"Sec.  26.  Where  value  has  at  any 
time  been  given  for  the  instrument,  the 
holder  is  deemed  a holder  for  value  in 
respect  to  all  parties  who  became  such 
prior  to  that  time." 

"Sec.  52.  A holder  in  due  course  is 
a holder  who  has  taken  the  instrument 
under  the  following  conditions: 

"(1)  That  it  is  complete  and  regular 
upon  its  face. 

"(2)  That  he  became  the  holder  of 
it  before  it  was  overdue,  and  without 
notice  that  it  had  been  previously  dis- 
honored, if  such  was  the  fact. 

"(8)  That  he  took  it  in  good  faith 
and  for  value. 


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“(4)  That  at  the  time  it  was  nego- 
tiated to  him  he  had  no  notice  of  any 
infirmity  in  the  instrument,  or  defect 
in  the  title  of  the  person  negotiating 
it” 

“See.  55.  The  title  of  a person  who 
negotiates  an  instrument  is  defective 
within  the  meaning  of  this  act,  when 
he  obtained  the  instrument,  or  any  sig- 
nature thereto,  by  fraud,  duress  or 
force  and  fear,  or  other  unlawful 
means,  or  for  an  illegal  consideration, 
or  when  he  negotiates  it  in  breach  of 
faith,  or  under  such  circumstances  as 
amount  to  a fraud. 

“Sec.  56.  To  constitute  notice  of  an 
infirmity  in  the  instrument,  or  defect  in 
the  title  of  the  person  negotiating  the 
same,  the  person  to  whom  it  is  nego- 
tiated must  have  had  actual  knowledge 
of  the  infirmity  or  defect,  or  knowledge 
of  such  facts  that  his  action  in  taking 
the  instrument  amounted  to  bad  faith. 

“Sec.  57.  A holder  in  due  course 
holds  the  instrument  free  from  any  de- 
fect of  title  of  prior  parties,  and  free 
from  defenses,  available  to  prior  par- 
ties among  themselves,  and  may  en- 
force payment  of  the  instrument  for 
the  full  amount  thereof  against  all  par- 
ties liable  thereon.” 

“Sec.  59.  Every  holder  is  deemed 
prima  facie  to  be  a holder  in  due 
course,  hut  when  it  is  shown  that  the 
title  of  any  person  who  has  negotiated 
the  instrument  was  defective,  the  bur- 
den is  on  the  holder  to  prove  that  he, 
or  some  person,  under  whom  he  claims 
acquired  the  title  as  a holder  * in  due 
course.” 

While  we  find  some  facts  and  cur- 
cmnstances  in  the  record  tending  to 
show  that  complainants  were  put  on  in- 
quiry as  to  defenses  against  this  note, 
we  cannot  say  that  complainants  “had 
actual  knowledge  of  the  infirmity  or 
defect  or  knowledge  or  such  facts  that 
its  action  in  taking  the  instrument 
amounted  to  bad  faith.” 

It  is  matter  for  observation  that  at 
the  time  of  purchasing  this  paper  the 
officials  of  the  complainant  bank  made 
no  inquiry  in  respect  to  the  makers  or 
as  to  the  consideration  of  the  notes,  al- 


though it  is  admitted  they  knew  noth- 
ing as  to  the  commercial  standing  or 
solvency  of  the  makers. 

Again,  it  appears  that  in  enforcing 
the  collection  of  the  notes  complainant 
has  ignored  the  guarantors  and  is  only 
suing  the  original  makers.  This  is 
worthy  of  comment,  since  the  guaranty 
was  for  the  payment  of  all  expenses 
of  collection  and  additional  interest. 
It  appears  the  guarantors  are  solvent 
and  reside  within  seven  miles  of  com- 
plainant's place  of  business,  and  yet, 
passing  them,  complainant  sent  this  pa- 
per to  Cleveland,  Tenn.,  for  collection, 
thereby  seeking  a lower  rate  of  inter- 
est and  incurring  attorney’s  fees  in  the 
prosecution  of  the  suit.  There  was  no 
obstacle  in  the  way  of  a primary  suit 
against  the  guarantors  on  this  form 
of  guaranty.  It  is  well  settled  in  Ten- 
nessee that,  when  the  guaranty  is  ab- 
solute, no  demand  or  exhaustion  of  the 
maker  is  required;  nor  is  any  notice 
required  of  the  acceptance  or  default. 
It  does  not  matter  whether  the  guar- 
anty stipulates  that  the  maker  will  pay, 
or  that  the  guarantor  will  pay,  nor 
whether  the  maker  is  solvent  or  not.  In 
either  event,  the  undertaking  is  abso- 
lute, and  the  guarantor  may  pay  the 
amount,  or  see  that  it  is  paid.  This  is 
not  the  case  of  a guaranty  of  solvency 
or  collectibility,  which  requires  pre- 
vious demand  and  suit.  (Klein  vs. 
Kern,  94  Tenn.  54,  and  authorities 
there  cited.) 

The  only  explanation  of  this  un- 
businesslike procedure  on  the  part  of 
complainant  bank  is  that  the  firm  of 
guarantors  did  a valuable  business 
with  the  bank  and  that  complainant 
would  do  anything  to  protect  them. 

The  main  proposition  presented  by 
counsel  for  defendants  is  that  com- 
plainant is  not  a holder  of  said  paper 
for  value  within  the  meaning  of  our 
negotiable  instrument  law.  It  is  said 
it  is  not  shown  that  complainant  has 
ever  paid  anything  in  money,  or  the 
equivalent  for  said  paper;  but  the 
cashier  of  the  bank  merely  testifies  that 
he  gave  said  firm  “credit  for  the 
amount  at  the  First  National  Bank  of 


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Elgin.”  It  is  said  it  is  not  shown  that 
said  credit  was  ever  used  by  said  in- 
dorsers, W.  S.,  J.  B.  & B.  Dunham. 
The  entire  testimony  on  this  subject  is 
found  in  the  deposition  of  A.  C.  Haw- 
kins, cashier  of  the  complainant,  Elgin 
City  Banking  Company.  He  tells  of 
the  purchase  of  said  notes,  together  with 
sundry  other  notes,  in  one  lot,  from 
W.  S.  Dunham,  of  the  firm  of  W.  S.,  J. 
B.  and  B.  Dunham,  paying  therefor  the 
full  amount  of  said  notes,  with  ac- 
crued interest  to  date  of  purchase,  at 
said  bank,  in  the  usual  course  of  busi- 
ness. This  was  the  testimony  of  the 
witness  on  his  direct  examination,  from 
which  it  appears  that  a prima  facie 
case  of  a holder  for  value  is  made  out; 
but,  on  cross-examination  of  the  wit- 
ness at  a later  date,  he  was  asked, 
“Q.  4.  Do  you  recall  how  you  paid 
for  them  [referring  to  the  notes]  ?” 
and  he  answered,  “I  gave  them  credit 
for  the  amount  at  the  First  National 
Bank  of  Elgin  on  July  18,  1904.”  It 
will  be  observed  that  the  alleged  credit 
was  not  given  in  the  bank  which  pur- 
chased the  notes  (the  complainant,  El- 
gin City  Banking  Company),  but  at  a 
different  bank,  namely,  the  First  Na- 
tional Bank  of  Elgin,  111. 

The  law  seems  to  be  settled  that, 
when  a bank  simply  discounts  a note 
and  credits  the  amount  thereof  on  the 
indorser’s  account,  without  paying  to 
them  any  value  for  it,  it  is  not  enough 
to  constitute  such  bank  a prima  facie 
purchaser  for  value  of  the  note.  (Se- 
lover,  Neg.  Inst.  Laws,  p.  217;  2 Amer. 
& Eng.  Ency.  of  Law,  391 , 392;  War- 
man  vs.  First  Nat.  Bank,  185  111.  60.) 

The  reason  is  that  the  proceeds  of 
the  discount  may  be  credited  to  the 
bank  by  making  a change  of  entries 
on  its  own  books.  It  is  said,  however, 
that  this  rule  of  law  has  no  applica- 
tion where  the  credit  to  the  seller  of 
negotiable  paper  is  given  by  the  pur- 
chaser, not  on  its  own  books,  but  in  a 
different  bank.  It  is  said  the  presump- 
tion must  be,  in  such  case,  that  the  pur- 
chaser has  paid  money,  surrendered  se- 
curities, released  an  obligation,  or  itself 
assumed  an  obligation  in  the  other 


bank,  in  order  to  secure  this  credit. 
The  record  fails  to  show  why  pay- 
ment of  the  notes  was  made  in  this 
manner,  nor  the  precise  nature  of  the 
transaction  by  which  the  complainant 
bank  secured  credit  to  the  seller  in  the 
First  National  Bank  of  Elgin  for  the 
amount  of  these  discounted  notes. 

It  is  well  settled  that  a purchaser  of 
commercial  paper  is  a holder  for  value 
and  in  due  course  of  trade,  when  he 
“has  given  for  the  note  his  money, 
goods,  or  credit,  at  the  time  of  receiv- 
ing it,  or  has  no  account  of  it,  sustained 
some  loss  or  incurred  some  liability.” 
(Nichol  vs.  Bate,  10  Yerg.  429;  Kim- 
bro  vs.  Lytle,  10  Yerg.  417;  Bank  vs. 
Johnston,  105  Tenn.  521.) 

As  already  seen,  by  section  25  of 
our  negotiable  instrument  law  (Acts  of 
1899)  it  is  provided:  “Value  is  any 

consideration  sufficient  to  support  a 
simple  contract.”  There  is  no  trouble, 
therefore,  in  holding  that,  if  the  com- 
plainant bank  had  obtained  credit  in 
favor  of  the  seller  in  a solvent  bank 
for  the  amount  of  the  discounted  paper, 
that  would  be  a sufficient  consideration 
to  constitute  the  purchaser  a holder  for 
value. 

The  difficulty  presented  arises  out  of 
the  indefiniteness  of  the  testimony. 
The  witness  was  not  asked  by  counsel 
on  either  side  for  an  explanation  of 
his  statement,  “I  gave  them  credit  for 
the  amount  at  the  First  National  Bank 
at  Elgin.”  It  does  not  appear  from  the 
record  that  this  credit  was  ever  used 
by  W.  S.,  J.  B.  & B.  Dunham.  It  does 
not  appear  how  the  credit  was  given, 
and  the  court  cannot  determine,  from 
the  unexplained  statement  of  the  wit- 
ness, whether  or  not  the  credit  was 
real  and  substantial.  The  burden  of 
proof  is  on  complainant  to  show,  on 
these  facts,  that  it  was  a holder  for 
value. 

The  fraud  that  vitiated  the  original 
transaction  was  the  conduct  of  the 
agent,  Campbell,  in  representing  to 
five  of  the  purchasers  that  Beard,  Hall, 
and  Thurston  had  become  equal  part- 
ners in  the  purchase  of  the  horse,  when 
this  agent  had  secretly  arranged  with 


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these  three  parties  to  pay  them  a con- 
sideration to  allow  the  use  of  their 
names  as  purchasers  and  to  release 
them  from  the  payment  of  their  quota 
of  the  purchase  money. 

Affirmed. 


PRESENTMENT  OF  NOTE 
WHERE  BANK  HAS  SEVERAL 
BRANCHES . 

IRON  CLAD  MANUFACTURING  CO. 
vs.  SACKIN,  et  A L. 

SrPREME  COURT  OF  NEW  YORK,  KINGS 
COUNTY,  MARCH  23,  1908. 

Where  a promissory  note  is  made  pay- 
able at  one  of  several  “branches”  main- 
tained by  a trust  company  in  the  same 
county,  presentment  at  tlie  main  office  of 
the  company,  which  receives  and  retains  the 
note  is  sufficient  under  the  Negotiable  In- 
struments Law. 

KELLY,  J:  The  note  was  made  by 
Marx  & Harper,  indorsed  by 
Sackin,  and  delivered  to  plaintiff.  It 
is  alleged  in  the  complaint,  paragraph 
3,  and  not  denied  in  the  answer,  that 
the  note  was  payable  at  the  Jenkins 
Trust  Company  in  the  borough  of 
Brooklyn.  Indeed,  in  the  separate  de- 
fenses * pledged  in  the  answer  the 
place  where  the  note  is  to  be  paid  and 
the  bank  alleged  to  have  had  the  cus- 
tody of  the  funds  with  which  to  pay  it 
is  always  described  as  “Jenkins  Trust 
Company,”  and  “Jenkins  Trust  Com- 
pany of  Brooklyn.”  The  note  fell  due 
on  October  23,  1907,  and  on  that  day 
it  was  presented  for  payment  at  the 
main  office  of  the  Jenkins  Trust  Com- 
pany, at  the  corner  of  Nostrand  and 
Gates  avenues,  in  Brooklyn.  Under 
modern  banking  methods  a system  of 
branches  of  banking  institutions  has 
come  in  vogue — a system  unknown  un- 
til recently,  and  which  I am  free  to 
say  is  not  in  keeping  with  the  con- 
servative way  of  conducting  banking 
in  Ihe  past — and  this  note  was  payable 
at  Jenkins  Trust  Company  Bath 
Beach  Branch.  When  the  Jenkins 
Trust  Company  received  the  note  for 
payment  at  its  main  office  on  the  day 
when  it  was  due,  it  retained  the  note 


and  sent  it  to  the  Bath  Beach  branch 
office.  It  reached  the  branch  office  on 
the  afternoon  of  the  24th,  after  bank- 
ing hours.  The  makers  had  cash  on 
deposit  with  the  Jenkins  Trust  Com- 
pany sufficient  to  pay  the  note,  but 
it  was  not  paid  on  October  23,  or  24 
or  25,  and  the  Jenkins  Trust  Company 
suspended  payment  on  the  25th  about 
noon.  The  makers  had  their  account 
at  the  Bath  Beach  branch,  and  it  is 
said  that  there  is  no  explanation  of 
why  the  note  was  not  paid  at  the 
branch  office  on  the  morning  of  the 
25th  before  the  bank  suspended  pay- 
ment. 

But  I think  the  presentation  of  the 
note  on  the  day  on  which  it  was  pay- 
able at  the  main  office  of  the  Jenkins 
Trust  Company  was  sufficient.  The 
defendants  quote  section  133  of  the 
Negotiable  Instruments  Law  (Laws 
1897,  p.  736,  c.  612): 

“Presentment  for  payment  is  made 
at  the  proper  place  where  the  place  of 
payment  is  specified  in  the  instrument 
and  it  is  there  presented.” 

There  is  but  one  Jenkins  Trust  Com- 
pany, one  president,  secretary,  cashier, 
and  the  other  officers  recognized  by 
law.  There  may  be  assistant  cashiers 
or  tellers  at  the  branches,  but  the 
branches  are  not  separate  corporations. 
The  corporation,  Jenkins  Trust  Com- 
pany, had  the  money  of  the  makers  on 
deposit.  It  makes  no^  difference  where 
the  company  received  it.  The  corpo- 
ration was  responsible  no  matter  at 
what  “branch”  it  was  received.  If  the 
note  had  been  presented  at  a “branch” 
other  than  the  “branch”  named  on  the 
face  of  the  note,  some  question  might 
arise,  but  in  this  case  the  note  was 
presented  at  the  main  office.  The 
greater  includes  the  less.  The  maker 
selected  the  bank  at  which  the  note  was 
to  be  paid,  and,  when  the  holder  pre- 
sented it  at  the  main  office  of  that  bank 
and  the  bank  received  it,  I cannot  see 
why  the  holder  is  responsible  for  the 
failure  of  the  banking  company  to 
pay  it  then  and  there,  or  because,  for 
its  own  convenience,  the  banking  com- 


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pany  saw  fit  to  send  it  to  a “branch” 
or  delay  in  sending  it.  There  was  a 
regular  course  of  dealing  proved  be- 
tween the  Mechanics'  Bank,  which  held 
the  note  for  collection,  and  the  Jenkins 
Trust  Company,  by  which  notes  pay- 
able at  “branches”  were  presented 
either  at  the  branch  or  the  main  office, 


but  without  this  course  of  dealing  I 
think  presentation  at  the  main  office 
was  sufficient. 

Both  parties  moving  for  the  direc- 
tion of  a verdict,  I direct  a verdict  for 
the  plaintiff  for  the  amount  of  the 
note,  $871.45,  and  interest,  $19.61; 
total  $891.06. 


NOTES  OF  CANADIAN  CASES  AFFECTING  BANKERS. 

[Edited  by  John  Jennings,  B.A.,  LL.B.,  Barrister,  Toronto.] 


BANKS  AND  BANKING— OVER- 
DR AWN  CUSTOMER’S  AC- 
COUNT-PROMISSORY NOTES 
— COLLATERAL  SECURITIES— 
TRANSFER  TO  THIRD  PERSON 
— INSPECTION  OF  CUSTOM- 
ER’S ACCOUNT— BANK  ACT , 
1 £90,  SEC . 46  — INTEREST  — 

COMPOUNDING . 

MONTGOMERY  VS.  RYAN. 

RYAN  V8.  B*NK  OP  MONTREAL  AND 
MONTGOMERY  (l6  O.  L.  R,  p.  75). 

HEAD  NOTE:  R.,  having  had  an  ac- 
count with  a bank  for  many  years  previ- 
ous to  the  16th  of  July,  1906,  was  on  that 
day  indebted  to  the  bank  in  a large  sum 
for  moneys  advanced,  for  which  the  bank 
held  securities  pledged  to  them  by  R.,  and 
a Promissory  Note  made  by  R.,  payable  on 
demand,  for  a sum  larger  than  the  amount 
then  due.  M.  had  been  negotiating  with 
the  bank  for  an  assignment  of  the  debt 
due  by  R.,  and  had  been  permitted  by  the 
bank  to  see  the  entries  m their  books  re- 
lating to  that  debt,  and,  on  the  day  men- 
tioned, the  bank  assigned  to  M.  the  sum 
due  and  all  the  securities  held  by  them, 
covenanting  that  the  sum  named  was  due 
and  to  produce  and  exhibit  their  books  of 
amount  and  other  evidence  of  indebted- 
ness, etc.  The  pledged  securities  were 
handed  over  to  M.,  and  afterwards  the  de- 
mand note,  upon  which  he  sued  R.,  who 
brought  a cross-action  against  the  bank  and 
M.  for  an  account  and  damagej  and  other 
relief. 

HELD,  that  the  bank  was  not  probihited 
by  sec.  4-6  of  the  Bank  Act,  1890,  from  al- 
lowing M.,  for  the  purposes  mentioned,  to 
inspect  the  account  of  R.  with  the  bank; 
that  the  agreement  was  not  invalid;  that 
M.  was  entitled  to  succeed  in  his  action 
upon  the  note;  and  that  R.’s  action  failed. 

Held,  also,  Meredith  J.  A.,  dissenting, 
that  the  bank  was  not  entitled  to  charge 
R.  compound  interest;  but  where  the  bank 
had  made  a discount  or  an  advance  for  a 


specified  time  and  had  reserved  the  in- 
terest in  advance,  this  should  be  allowed; 
in  other  cases,  where  there  had  been  an 
overdraft,  and  payments  had  been  made, 
interest  should  be  reckoned  up  to  the  date 
of  each  payment,  and  the  sum  paid  ap- 
plied to  the  discharge  of  the  interest  in 
the  first  place,  and  any  surplus  to  the  dis- 
charge of  so  much  of  the  principal. 

Judgment  of  Clute  J.,  reserved. 


CTATEMENT  OF  FACTS:  The 

^ action  of  Montgomery  vs.  Ryan 
was  brought  to  recover  $12,789-24  and 
interest  at  six  per  cent,  from  July  16, 
1906,  upon  a demand  note  dated  No- 
vember 16,  1905,  for  $17,240,  with 
interest  at  six  per  cent,  until  paid, 
made  by  Peter  Ryan  (the  defendant) 
to  the  Bank  of  Montreal,  and  trans- 
ferred to  Montgomery,  the  plaintiff,  by 
the  Bank  of  Montreal,  with  certain 
collaterals  pledged  by  Ryan  to  secure 
his  account  with  the  Bank  of  Montreal. 

Ryan,  by  his  defence,  denied  indebt- 
edness, and  alleged  that  the  note  had 
been  paid  by  collections  made  by  the 
bank,  of  which  only  partial  credits 
had  been  given;  that  the  bank  held  as 
collateral  a claim  against  the  Ashcroft 
Water,  Electric  and  Improvement  Com- 
pany (hereafter  referred  to  as  the  Ash- 
croft Company),  upon  which  the  bank 
recovered  judgment  for  $8,325.60  and 
costs  of  action,  which  had  been  paid, 
amounting  in  all  to  $3,775.31 ; that  the 
bank  received  other  collections  from 
collaterals  and  wrongly  debited  the  de- 
fendant (Ryan)  with  certain  alleged 
costs,  and  illegally  charged  interest, 
discount,  and  compound  interest  against 
the  defendant;  and  he  counterclaimed 
for  $12,500. 

The  second  action  was  brought  by 


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Peter  Ryan  (the  defendant  in  the  for- 
mer action)  against  the  Bank  of  Mont- 
real and  Montgomery  in  respect  of  the 
same  transactions.  By  the  statement 
of  claim  Ryan  alleged  that  for  many 
years  he  was  a customer  of  the  Bank 
of  Montreal  and  had  his  account  with 
the  bank  since  prior  to  1890;  that  in 
July  or  August,  1906,  the  Bank  of 
Montreal  claimed  a balance  of  $12,- 
789-24  as  the  balance  due  upon  the 
said  promissory  note,  and  he  repeated 
the  charges  in  substance  of  wrongful 
debits  for  interest  and  not  giving 
credit  for  collections,  and  that  the  bank 
held  a large  number  of  securities 
pledged  by  Ryan  as  collateral  to  his 
account,  of  much  greater  value  than 
the  balance  claimed  to  be  due.  Ryan 
then  charged  that  the  bank,  having 
made  these  overcharges,  and  not  giv- 
ing due  credit  to  the  plaintiff,  colluded 
and  conspired  with  Montgomery  against 
the  plaintiff  (Ryan)  to  maintain  this 
illegal  and  wrongful  condition  of  the 
account,  and  prevented  the  plaintiff 
from  obtaining  a just  and  proper  ac- 
count-taking with  the  bank,  so  as  to 
enable  the  bank  to  wrongfully  recover 
the  $12,789-24  claimed  as  due.  It  was 
charged  further  that  Montgomery  was 
actuated  by  malicious  motives,  of  which 
the  Bank  of  Montreal  were  well  aware, 
and  that  the  bank,  in  order  to  promote 
their  own  wrongful  purposes  and  ob- 
jects, and  the  wrongful  and  malicious 
purposes  of  Montgomery,  assigned  and 
transferred  the  plaintiff’s  account  as 
a customer  of  the  bank,  and  the  amount 
of  the  indebtedness  then  alleged  to  be 
due,  and  received  therefor  the  sum  of 
$12,000,  for  the  purpose  of  enabling 
Montgomery  to  attempt  to  receive  from 
the  plaintiff  the  said  sum  as  a pretend- 
ed balance  due  on  the  account  and  upon 
said  promissory  note,  and,  as  a part  of 
such  transaction,  assigned  and  trans- 
ferred all  the  securities  collateral 
to  said  account;  that  the  bank  wrong- 
fully and  illegally  exposed  to  defend- 
ant Montgomery  the  account  and  deal- 
ings and  transactions  by  the  plaintiff 
as  a customer  of  the  said  bank  in  order 
to  effect  their  wrongful  purpose,  and 


to  promote  the  combination  and  collu- 
sion between  the  bank  and  the  defend- 
ant Montgomery;  that  the  Bank  of 
Montreal  entered  into  a covenant  of 
indemnity  with  Montgomery  at  the 
time  of  such  transfer;  that  Montgom- 
ery caused  proceedings  to  be  taken  in 
the  High  Court  against  Ryan  for  the 
recovery  of  the  alleged  balance;  and 
that  Montgomery  throughout  was  the 
agent  of  the  bank.  It  was  further  al- 
leged that  the  bank  charged  an  exces- 
sive rate  of  interest;  that  the  defend- 
ants intended  to  attempt  to  realize 
upon  the  said  securities,  and  threatened 
the  sale  and  sacrifice  of  the  same;  that 
the  plaintiff  demanded  a full  and  true 
statement  in  detail  of  his  account  with 
the  bank,  which  had  been  refused. 
There  were  also  charges  of  negligence 
in  collecting  the  securities. 

The  plaintiff  Ryan  in  his  action 
claimed  an  account  against  the  bank 
and  to  have  it  declared  that  the  charges 
of  interest  and  compound  interest  were 
excessive;  to  set  aside  and  cancel  the 
transfer  of  the  account  and  securities 
and  statement  of  all  securities  held  by 
the  defendants  for  the  plaintiff ; and 
an  order  enjoining  the  defendants 
from  further  transferring  or  dealing 
with  the  securities;  and  a declaration 
as  to  the  wrongful,  illegal,  and  collus- 
ive acts  by  and  between  the  defendants 
and  others  as  against  the  plaintiff ; and 
claimed  $50,000  damages. 

The  bank  denied  all  charges  of  fraud 
or  other  improper  conduct,  and  alleged 
that  on  November  15,  1905,  the  bank 
rendered  a statement  to  Ryan  showing 
the  balance  due  upon  his  account  at 
that  time  of  $17,240,  which  he  ad- 
mitted to  be  correct,  and  therefor  gave 
the  said  note;  that  the  bank  held  col- 
lateral securities  of  Ryan,  which  were 
dealt  with  under  his  direct  instructions; 
that,  among  other  securities,  were  cer- 
tain promissory  notes  made  by  the  Ash- 
croft Company,  upon  which  the  bank 
brought  action  at  his  request  in  British 
Columbia.  That  action  was  defended, 
but  when  the  action  came  on  for  trial 
one  John  Shields,  chairman  of  the  Ash- 
croft Company,  makers  of  the  said 


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note,  offered  to  consent  to  judgment  in 
favor  of  the  bank,  and  to  take  an  as- 
signment of  the  claim  of  the  said  de- 
fendants against  the  plaintiff  and  all 
the  securities,  including  said  judgment, 
held  as  collateral  thereto;  that  the  bank 
accepted  the  offer,  and  on  July  16. 
190G,  an  agreement  was  made  between 
the  Bank  of  Montreal  and  Montgom- 
ery, as  the  nominee  of  Shields,  where- 
by the  bank,  in  consideration  of  $12,- 
789.24,  transferred  to  Montgomery  the 
Ryan  account  amounting  then  to  $12,- 
789.24,  and  assigned  and  transferred 
to  Montgomery  the  said  collateral  se- 
curities; that  the  bank  received  the  said 
sum,  being  the  full  consideration  named 
in  the  assignment  and  transfers,  and 
handed  over  to  Montgomery  the  said 
note  and  all  the  collateral  securities 
held  by  the  bank.  The  bank  denied 
that  they  charged  illegal  rates  of  inter- 
est, and  said  that  it  was  not  true  that 
they  refused  an  account;  that  if  an  ac- 
count were  granted  it  should  be  limited 
to  six  years;  and  finally  alleged  that  at 
the  time  of  the  assignment  Ryan  was 
justly  and  truly  indebted  to  the  bank 
in  the  said  sum  of  $12,789-24  in  re- 
spect of  said  promissory  note;  that 
they  had  demanded  payment  and  that 
payment  had  been  refused. 

The  defendant  Montgomery  denied 
a11  charges  of  improper  conduct  or  that 
he  was  acting  as  agent  of  the  bank. 
He  claimed  under  the  assignment  of 
July  16,  above  referred  to,  and  under 
the  said  note  endorsed  to  him,  of  which 
he  claimed  to  be  the  purchaser  without 
notice,  and  claimed  the  balance  upon 
the  note,  less  $46.5.85  collected.  He 
alleged,  further,  that  among  the  securi- 
ties given  by  the  plaintiff  was  a certain 
mortgage  of  the  Metropolitan  Soap 
Company  for  $10,000,  dated  the  28tli 
January,  1904;  that  the  plaintiff  never 
executed  the  assignment  of  the  same 
for  registration,  and  had  refused  to  do 
so;  that  among  said  securities  were  also 
certain  debentures,  from  one  to  twenty 
inclusive,  of  the  Cape  Breton  Explora- 
tion and  Development  Company,  Lim- 
ited, for  $2,500  each,  registered  in  the 
name  of  the  plaintiff,  and  that  he  had 


not  transferred  these  securities  so  as 
to  enable  the  defendant  to  be  regis- 
tered as  owner  thereof,  and  that  he 
had  refused  to  do  so;  and  by  way  of 
counterclaim  he  asked  damages  for 
such  refusal  and  an  injunction  restrain- 
ing the  plaintiff  from  incumbering  or 
dealing  with  the  said  securities,  and  for 
a mandatory  order  to  assign  said  mort- 
gage and  transfer. 

The  Trial  Judge  held  that  there  were 
four  points  for  decision: 

1.  Has  the  bank  been  guilty  of  a 
breach  of  Section  46  of  the  Bank  Act 
which  provides,  “The  books,  corre- 
spondence and  funds  of  the  bank  shall 
at  all  times  be  subject  to  the  inspection 
of  the  directors;  but  no  person  who  is 
not  a director  shall  be  allowed  to  in- 
spect the  account  of  any  person  deal- 
ing with  the  bank/*  After  reviewing 
the  authorities  and  circumstances  in 
this  case  the  Trial  Judge  was  of  the 
opinion  that  the  bank  had  been  guilty 
of  this  section  quoted. 

2.  Does  such  breach  invalidate  the 
whole  agreement?  This  question  was 
answered  in  the  affirmative. 

8.  Having  regard  to  the  manner  in 
which  the  note  was  received,  does  it 
preclude  the  plaintiff  Montgomery 
from  recovering  on  the  note?  It  was 
held  that  the  note  was  received  only 
pursuant  to  the  covenant  in  the  assign- 
ment for  further  assurance  and  that 
the  assignment  having  been  declared 
invalid,  this  question  should  also  be 
answered  in  the  affirmative. 

4.  Is  the  plaintiff  Ryan  entitled  to 
damages  for  the  alleged  wrong  done 
him  by  the  breach  of  the  Bank  Act  in 
permitting  his  account  to  be  inspected 
and  sold?  In  answer  to  this  the  Trial 
Judge  stated  that  in  his  view  the 
plaintiff  suffered  substantial  damages, 
which  he  assessed  at  $1,000.00. 

From  this  Judgment  an  appeal  was 
taken  to  the  Court  of  Appeal,  who  re- 
versed the  Judgment  of  the  Trial 
Judge. 

Judgment  (Moss,  C.J.O.;  Osler, 
G arrow,  Maclaren  and  Meredith, 
J.J.A.) : The  Court  of  Appeal  held  that 
the  liability  of  a bank  for  disclosing  its 


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customers’  account  was,  apart  from  the 
Statute,  a debatable  question.  They 
traced  the  present  section  46  of  the 
Bank  Act  from  the  original  section, 
passed  in  1871,  when  the  last  clause  of 
it  read  as  follows:  “But  no  sharehold- 
er, not  being  a director,  shall  be  al- 
lowed to  inspect  the  account  of  any 
person  dealing  with  the  bank,”  mnd 
held  that  it  was  undoubtedly  the  policy 
of  Parliament  when  it  dropped  this 
last  clause  to  declare  a policy  of  se- 
crecy as  to  the  accounts  of  persons 
dealing  with  the  banks  except  where 
there  existed  a good  ground  for  dis- 
closure. The  rule  as  to  secrecy  is  not 
an  absolute  one,  but  the  provisions  of 
the  Bank  Act  and  the  general  law  must 
be  looked  to  to  see  whether  the  circum- 
stances of  each  case  as  arises  furnishes 
a justification  to  the  bank  for  dis- 
closure. In  this  connection  it  is  im- 
portant to  notice  that  section  64  of  the 
Bank  Act  of  1890  declares  that  the 
bank  “may  deal  in,  discount,  and  lend 
money  and  make  advances  upon  the  se- 
curity of  and  may  take  as  collateral 
security  for  any  loan  made  by  it  Bills 
of  Exchange,  etc.,  etc." 

Had  the  bank  a right  to  sell  the 
claim,  whether  it  existed  simply  as  a 
debt,  or  whether  it  was  evidenced  by 
the  promissory  note?  In  my  opinion, 
the  language  of  section  64  of  the  Bank 
Act,  above  quoted,  is  quite  ample  to 
cover  the  transaction  in  question,  in- 
cluding the  securities  which  were  col- 
lateral to  the  debt  or  note.  The  bank 
was  authorized  to  “deal"  in  these  se- 
curities. Now,  “dealing"  in  them  in- 
cludes the  right  to  sell  as  well  as  the 
right  to  buy  them  or  to  lend  upon  them. 
Indeed,  the  idea  of  selling  or  distrib- 
uting is  the  primary  meaning  of  the 
word,  rather  than  buying  or  lending. 
And  even  if  this  special  power  was  not 
given  in  so  many  words  in  the  Act,  I 
think  it  would  also  be  covered  by  the 
concluding  words,  that  the  bank  “may 
engage  in  and  carry  in  such  business 
generally  as  appertains  to  the  business 
of  banking." 

It  is  common  knowledge  that  banks, 
when  in  need  of  money,  are  accus- 


tomed to  raise  it  by  rediscounting  their 
negotiable  paper  or  by  pledging  their 
securities,  and,  so  far  as  I know,  their 
right  to  do  so  has  never  been  chal- 
lenged. If  they  may  do  it  for  this 
purpose,  they  may  do  it  for  any  other 
lawful  purpose.  It  is  a mere  question 
of  policy,  of  which  the  bank  itself 
must  be  the  sole  judge.  I cannot  see 
on  what  grounds  the  Courts  can  inter- 
fere with  the  exercise  of  such  discre- 
tion. The  practice  is  expressly  recog- 
nized by  the  Bank  Act,  as  schedule  D 
requires  every  bank  to  state  the  amount 
of  its  “Loans  from  other  banks  in  Can- 
ada secured,  including  bills  redis- 
counted." 

Counsel  referred  to  the  fact  that  it 
was  necessary  to  amend  the  Bank  Act 
in  1900,  to  empower  one  bank  to  sell 
out  to  another,  as  showing  that  it  was 
not  lawful  for  a bank  to  sell  its  as- 
sets, but  in  view.  Parliament  having 
authorized  the  bank  to  dispose  of  its 
assets,  either  under  section  64  or  un- 
der the  amendment  of  1900,  recog- 
nized the  fact  that  in  one  case  as  well 
as  in  the  other  no  one  would  think  of 
buying  without  inspection,  and  did  not 
consider  it  necessary  that  special  pro- 
vision should  be  made  for  it  in  the  Act. 
The  fact  that  up  to  1890  the  prohibi- 
tion referred  only  to  shareholders,  and 
not  to  ordinary  prospective  purchasers 
of  assets,  may  have  been  a reason  for 
the  case  not  having  been  specially  pro- 
vided for.  But,  even  if  section  46  were 
to  have  the  meaning  claimed  by  the 
respondent,  I am  not  prepared  to  ad- 
mit that  the  consequences  would  be  such 
as  laid  down  by  the  Trial  Judge. 
However,  in  view  of  the  opinion  I have 
formed,  it  is  unnecessary  to  pursue 
this  farther. 

The  next  question  is  that  of  Inter- 
est. Apart  from  actual  agreement 
clearly  proved  the  right  of  the  bank 
to  charge  more  than  the  legal  rate  of 
interest  will  depend  upon  circum- 
stances, such  as  the  long  continued 
acquiescence  of  a customer  in  the 
charging  of  such  a rate,  his  acknowl- 
edgement of  the  correctness  of  his  ac- 
count from  time  to  time,  etc.,  and  in 


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this  particular  case  the  account  having 
extended  for  ten  years,  we  hold  the 
bank  entitled  to  seven  per  cent,  up  to 
the  date  upon  which  the  manager 
agreed  to  reduce  the  rate  to  six  per 
cent. 

The  question  of  compound  interest 
is,  however,  another  matter.  By  sec- 
tion 80  of  the  Bank  Act,  “the  .bank 
. . . may  stipulate  for,  take,  re- 

serve or  exact  any  rate  of  interest  or 
discount  not  exceeding  seven  per  cent, 
per  annum,  and  may  receive  and  take 
in  advance  any  such  rate,  but  no  high- 
er rate  of  interest  shall  be  recoverable 
by  the  .bank.” 

I do  not  think  under  the  facts  of 
this  case  it  can  be  said  that  Ryan  rati- 
fied or  acquiesced  in  a charge  of  com- 
pound interest,  or  that  he  is  now  in 
the  same  position  as  if  he  had  paid  it, 
and  was  seeking  to  recover  it  back.  I 
think  that  the  bank,  or,  rather,  their 
assignee,  Montgomery,  is  now  seeking 
to  recover  it  from  Ryan,  and  that  they 
are  precluded  by  this  section  from  so 
doing.  It  may  be,  as  said  by  counsel 
for  the  bank,  that  compounding  the  in- 
terest, does  not  amount  to  as  much  as 
taking  out  the  interest  in  advance  (that 
is  a mere  matter  of  computation)  ; but 
that  is  not  the  question. 

The  result  is  that  in  the  action  of 
Montgomery  vs.  Ryan  the  appeal 
should  be  allowed,  applying  the  same 
principle  to  the  case  of  Ryan  vs.  Bank 
of  Montreal  the  result  is  that,  as  the 
Bank  of  Montreal  was  within  their 
legal  rights  in  assigning  their  claim, 
the  plaintiff  has  no  ground  of  action 
against  them,  inasmuch  as  they  have 
not  committed  any  actionable  wrong 
against  him.  I do  not  think  it  is  with- 
in our  province  to  inquire  or  pass 
upon  whether  or  not  the  bank  treated 
the  plaintiff  with  the  consideration  due 
to  a customer  by  a bank.  Our  inter- 
vention is  shut  off  bv  the  fact  that 
there  is  no  injury  to  him  of  which  the 
Courts  can  take  cognizance.  By  the 
assignment  Montgomery  obtained 
against  Ryan  no  greater  right  or 
claim  than  was  possessed  by  the  bank. 


At  all  times  since  the  assignment  Ryan 
had  the  right  to  demand  and  obtain 
from  Montgomery  all  his  securities  for 
exactly  the  same  amount  as  he  could 
obtain  them  from  the  bank.  He  has 
not  to  pay  a single  dollar  more;  so 
that  I cannot  see  how  he  has  been 
damnified. 

For  these  reasons  I think  the  de- 
fendants* appeal  in  this  case  also 
should  be  allowed  and  the  action  dis- 
missed with  costs. 


THE  TREE  AND  ITS  FRUITS. 

OUR  objection  to  the  composition  of  the 
Monetary  Commission  appointed  at 
the  recent  session  of  Congress  rests 
primarily  on  the  belief  that  the  Commission 
will  be  dominated  by  men  who  represent 
other  interests  than  those  of  the  people. 
But  even  if  this  were  not  so,  the  members 
of  the  Commission  (except  Mr.  Burton  and 
Mr.  Weeks)  are  lacking  in  that  expert 
knowledge  without  which  it  is  impossible 
to  construct  a scientific  banking  and  cur- 
rency system.  As  Mr.  James  B.  Forgan, 
president  of  the  First  National  Bank,  re- 
cently said: 

Every  scientific  and  successful  banking 
system  in  the  world  to-dav  has  been  estab- 
lished after  full  investigation  and  deliberate 
consideration  by  those  whose  knowledge  and 
training  and  experience  have  made  them 
financial  experts.  Nor  can  we  hope  to  have 
a wise  determination  of  the  needs  of  our 
banking  and  currency  system  until  It  Is  left 
to  similar  expert  authority. 

We  do  not  gather  grapes  of  thorns  or 
figs  from  thistles,  and  we  shall  never  get 
anything  satisfactory  in  the  way  of  bank 
currency  until  the  advice  of  real  experts  is 
followed. 

Mr.  Aldrich  arrogantly  and  foolishly  de- 
clared that  he  did  not  know  of  any  bank  or 
bank  man  who  favored  his  bill! 

If  somebody  should  devise  a plan  of 
sanitation  and  submit  it  to  the  sanitary  en- 
gineers and  medical  authorities,  and  they 
should  unanimously  reject  it,  would  it  be 
considered  the  part  of  wisdom  to  adopt  the 
scheme  in  the  face  of  such  protest?  And 
yet  that  is  precisely  what  we  have  done 
with  respect  to  the  currency. 

The  Aldrich-V reeland  law  represents  the 
triumph  of  selfishness  and  ignorance  over 
honesty  and  intelligence.  And  there  never 
can  be  hope  of  betterment  while  legislation 
is  controlled  by  men  like  Aldrich  and  Can- 
non, or  until  we  have  a President  who  has 
the  courage  to  block  their  dangerous  game. 


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By  A.  C.  Steven,  of  the  Canadian  Bank  of  Commerce,  New  York. 


DURING  this  period  of  financial  legis- 
lation, as  a result  of  the  panic  of 
1907,  it  is  interesting  to  note,  that 
in  Canada  there  has  been  no  such  agita- 
tion, due  doubtless  to  the  fact  that  the  law 
under  which  the  banks  are  chartered  is 
revised  at  regular  intervals.  This  discus- 
sion of  financial  affairs  in  general,  and 
banking  methods  in  paiticular,  results  in 
the  framing  of  laws,  calculated  to  promote 
a banking  system,  which  will  be  equal  to 
the  requirements  of  the  business  community. 
Banking  in  Canada  as  it  stands  today 
is  therefore  not  the  creation  of  a hard  and 
fast  law  made  in  1870,  when  the  first  Bank 
Act  was  passed,  but  rather  the  result  of  a 
succession  of  laws,  each  throwing  additional 
safeguards  around  a system  excellent  even 
at  the  outset.  Although  legislation  may  oc- 
cur oftener,  it  is  compulsory  that  the  Bank 
Act  come  up  for  revision  every  ten  years, 
when  the  charters  of  the  various  banks  are 
renewed,  and  the  questions  in  regard  to 
banking  come  before  the  House  for  discus- 
sion. Probably  no  question  has  received 
more  attention,  at  these  decennial  periods, 
than  the  note  issue,  which  in  its  present 
condition,  lends  itself  admirably  to  the  re- 
quirements of  the  country. 

Government  Issues  or  Limited  Use. 

It  may  be  said  at  the  outset  that  the 
Dominion  Government  also  issues  notes  in 
volume  almost  equal  to  those  of  the  banks. 
About  two-thirds  of  this,  however,  is  not 
in  active  circulation,  consisting  as  it  does 
of  notes  of  the  larger  denominations  ranging 
from  $500  to  $5,000,  which  are  held  almost 
entirely  by  the  banks  as  reserve,  and  for 
clearing-house  settlements.  The  remaining 
one-third  is  made  up  of  $4,  $2,  and  $1 
notes,  which  supply  the  hand-to-hand  cur- 
rency of  the  country.  The  banks  in  Canada 
are  permitted  to  issue  notes  of  $5  and  mul- 
tiples thereof,  to  the  extent  of  their  paid- 
up  capital,  but  in  no  case  unless  the  amount 
subscribed  be  half  a million  dollars,  with 
^50,000  actually  paid  in.  The  balance  must 
be  paid  up  within  two  years.  This  circu- 
lation reaches  a field  not  covered  by  the 
Dominion  notes,  and  the  two  issues  are  by 
no  means  competitive.  The  Government 
notes  in  actual  circulation  are  of  the  smaller 
denominations,  and  naturally  the  amount 
outstanding  is  not  great.  It  is  interesting 


"Address  delivered  before  New  York  Chap- 
ter American  Institute  of  Banking. 


to  note,  then,  that  almost  the  entire  issue 
of  the  circulating  medium  in  Canada  is 
supplied  by  the  chartered  banks. 

Bond  Security  Not  Required  For  Bank 
Notes. 

Contrary  to  the  system  in  vogue  in  the 
bnited  States,  the  Canadian  bank  note  issue 
is  not  secured  by  Government  bonds,  nor 
by  a special  pledge  of  gold  as  is  the  case 
in  various  countries,  but  by  the  general 
assets  or  credits  of  the  bank,  hence  the 
name,  “asset  currency.”  This  form  of  se- 
curity is  greater  than  appears  at  first  sight. 
The  law  provides  that  in  case  of  failure  the 
note  issue  is  the  first  lien  upon  every  avail- 
able asset  of  the  bank.  Even  the  depos- 
its of  the  Government  have  no  prior  claim. 
As  an  example  of  the  strength  of  this  pro- 
vision, the  notes  in  circulation  of  all  the 
banks,  in  comparison  with  the  total  assets, 
will  be  found  to  be  one  to  twelve,  and  even 
in  times  of  greatest  expansion  less  than 
one-tenth.  It  would  indeed  be  a disastrous 
failure  should  any  bank  be  unable  to  pay 
ten  cents  on  the  dollar. 

The  double  liability  clause  is  an  addition- 
al safeguard,  not  only  to  the  note-holders, 
but  to  the  depositors  as  well.  In  case 
of  failure,  with  assets  insufficient  to  liqui- 
date the  note  issue,  or  other  liabilities,  the 
stockholders  of  the  bank  are  compelled  to 
surrender  an  amount  equal  to  the  par  value 
of  the  shares  standing  in  their  names. 

To  overissue,  even  for  one  day,  is  strictly 
against  the  law,  and  by  way  of  punishment, 
the  Government  imposes  a heavy  fine,  rang- 
ing as  high  as  $100,000.  In  periods  of  great 
commercial  activity  care  must  be  exercised 
to  keep  within  the  limit  prescribed  by  law. 
In  order  to  make  this  supervision  more 
complete,  in  1900,  the  Bank  Act  was  re- 
vised. so  as  to  permit  an  officer  of  the 
Canadian  Bankers’  Association  to  audit  the 
circulation  books  of  the  various  banks  and 
certify  to  the  amount  outstanding. 

Absolute  Safety  of  the  Notes. 


When  the  Bank  Act  came  up  for  con- 
sideration in  1890,  a provision  was  made 
requiring  the  banks  to  lodge  with  the  Gov- 
ernment an  amount  equal  to  five  per  cent, 
of  the  notes  in  circulation.  The  deposit 
is  adj  usted  yearly,  and  made  up  on  the 
average  maximum  issue,  as  shown  in  the 
monthly  balance  sheets,  filed  with  the  Min- 
ister of  Finance.  On  this  Bank  Circula- 
tion Redemption  Fund,  as  it  is  called,  the 


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Government  allows  interest  at  the  rate  ot 
three  per  cent.,  and  in  case  the  receiver  of 
a suspended  bank,  at  the  expiration  of  two 
months,  be  unable  to  redeem  the  notes, 
they  are  charged  to  this  fund,  which  is 
later  reimbursed  from  the  assets  of  the 
failed  bank.  It  is  interesting  to  note,  at 
this  point,  that  not  one  dollar  of  the  fund 
has  ever  been  required.  The  law  further 
provides  for  additional  calls  on  the  banks, 
in  case  of  necessity,  until  every  bank  note 
has  been  redeemed.  This  provision  is 
worthy  of  further  consideration,  so  far- 
reaching  is  the  effect.  It  is,  in  fact,  a ft 
absolute  guarantee  of  payment  of  all  the 
notes  of  the  chartered  banks  in  Canada.  In 
other  words,  this  amendment  to  the  law 
calls  for  the  hypothecation  of  every  avail- 
able asset  of  all  the  banks  in  Canada  to 
the  redemption  of  the  notes  of  any  one 
bank,  or  number  of  banks.  There  can  be 
no  greater  security  than  this,  and  it  is  not 
extravagant  to  say  that  the  safety  of  a 
bank  note  issue  governed  by  such  laws  is 
absolutely  unquestioned. 

Adaptability  to  Business  Needs. 

The  model  currency  is  one  which  works 
hand  in  hand  with  the  business  of  the 
country,  or,  so  to  speak,  is  the  direct  result 
of  business  demand.  Should  the  demand 
increase  or  decrease,  the  supply  of  notes 
must  in  all  cases  follow.  This  element 
of  elasticity  is  absolutely  necessary  to  a 
note  issue  which  it  is  expected  will  ade- 
quately supply  the  wants  of  the  business 
community.  It  cannot  be  said  that  the 
notes  of  the  national  banks  of  the  United 
States  possess  this  virtue,  and  under  the 
present  law  they  never  will.  It  is  amazing 
that  they  should  still  be  bound  by  a law 
passed  as  early  as  1863,  with  the  direct 
object  in  view  of  maintaining  a market  for 
Government  bonds.  When  the  very  funda- 
mentals are  at  fault,  it  is  not  surprising 
that  the  currency  problem  in  the  United 
States  is  a most  intricate  one. 

In  times  of  great  commercial  activity 
and  especially  during  the  fall  when  the  crops 
are  in  motion,  the  feature  of  elasticity  is 
most  prominently  brought  to  our  notice. 
The  farmer  is  the  backbone  of  the  country. 
His  crops  determine  the  course  of  prices 
and  whether  or  not  the  year  will  be  one 
of  prosperity.  He  is  not  a dealer  in  checks 
or  drafts;  to  conduct  his  business  cash  is 
required,  and  in  increasing  quantities  during 
the  crop-moving  period.  As  previously 
stated,  with  the  exception  of  the  small 
change-making  notes,  the  Canadian  banks 
are  called  upon  to  supply  almost  the  entire 
circulating  medium,  and  notwithstanding  the 
extra  strain  to  which  they  are  subject,  have 
always  been  equal  to  this  demand.  The 
increase  at  such  a time  will  vary  from 


twenty-five  to  forty  per  cent  above  the  low 
period.  When  their  work  has  been  accom- 
plished, the  notes  are  returned  to  the  banks 
and  placed  in  the  tills  in  readiness  for 
further  use. 

Naturally  the  question  arises  as  to  how 
such  an  increase  in  the  circulating  power 
is  accomplished.  Simply  by  the  bankers 
being  far  seeing  enough  to  anticipate  the 
demanu  by  keeping  the  paid-up  capital  of 
their  respective  banks  considerably  in  ex- 
cess of  the  notes  outstanding.  The  branch 
system  of  banking  affords  them  splendid 
opportunities  of  viewing  the  business  of  the 
country  from  all  sides.  Many  of  the  banks 
have  already  applied  to  the  Government 
for  permission  to  increase  the  capital  stock 
which  may  be  offered  to  the  shareholders 
at  short  notice.  As  the  new  stock  is  paid 
up,  the  relative  amount  of  additional  notes 
is  issued.  As  will  be  shown  later,  it  is 
profitable  to  issue  bank  notes  in  Canada. 
So  long  as  it  remains  profitable  (and  there 
is  no  reason  to  expect  that  it  should  at 
any  time  be  otherwise)  the  banks  will  make 
every  effort  to  keep  their  notes  in  circula- 
tion, and  as  the  demand  increases,  so  will 
the  amount  of  the  paid-up  capital  to  a 
corresponding  degree.  The  demand  of 
course  is  due  to  business  activity  and  is 
supplied  by  the  banks  because  to  do  so  is 
remunerative.  The  success  of  the  note  issue 
is  dependent  largely  upon  this  fact. 

How  Subplus  Notes  Abe  Retired. 

Having  shown  how  the  increase  is  effected 
let  us  now  consider  the  fate  of  the  bank 
notes  during  the  quieter  periods.  After  a 
heavy  fall  season  naturally  the  volume  of 
business  is  reduced  and  fewer  notes  being 
required  they  are  deposited  by  the  public 
in  the  ordinary  course  of  business.  A bank 
in  receipt  of  its  own  notes  will  reissue  them 
after  separating  the  soiled  and  mutilated, 
which  are  sent  to  the  head  office  for  de- 
struction. The  notes  of  other  banks,  how- 
ever, are  passed  through  the  clearing-house 
in  the  same  manner  as  checks,  drafts  and 
other  demand  items.  In  the  smaller  towns, 
where  there  are  no  clearing-houses,  set- 
tlement is  made  direct  and  the  outside 
notes  are  sent  to  the  nearest  clearing  point. 
Balances  at  the  clearing-house  are  settled 
daily  in  legal-tender  notes  or  gold.  Com- 
petition between  the  banks  is  very  keen, 
and  naturally  their  efforts  are  directed 
towards  keeping  their  own  notes  in  circula- 
tion and  their  own  notes  only.  This  results 
in  the  daily  redemption  of  all  surplus  notes, 
and  prevents  the  issue  from  being  inflated. 
This  measure  is  so  effective  as  to  preclude 
the  possibility  of  a greater  issue  of  notes 
than  is  actually  required. 

The  branch  system  of  banking  is  a splen- 
did medium  for  the  circulation  of  notes. 


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and  in  many  districts  the  issue  remains  out- 
standing for  a considerable  length  of  time. 
In  order  to  keep  the  notes  at  par,  the  banks 
are  compelled  to  establish  redemption 
agents  in  the  principal  financial  districts 
of  the  country.  This  does  not  mean,  how- 
ever, that  it  is  compulsory  for  all  banks 
to  open  branches  a*:  these  various  points, 
as  the  work  can  be  readily  performed  by 
those  already  established.  In  this  manner 
the  notes  of  an  eastern  bank  pass  current 
in  the  far  west,  and  are  not  subject  to 
discount  or  to  delay  in  redemption. 

Imperfections  of  the  National  Bank 
Notes. 

It  cannot  be  said  that  the  extraordinary 
demand  for  cash  during  the  fall  is  readily 
met  in  the  United  States.  It  is  unprofit- 
able for  the  national  banks  to  take  out  cir- 
culation. Even  should  the  prevailing  rate 
of  interest  during  the  stringent  period  show 
a profit  in  the  issue  the  law  limiting  the 
redemption  of  all  bank  notes  to  nine  mil- 
lion dollars  per  month,  places  an  effective 
check  on  the  desire  of  a bank  to  issue 
notes  from  a remunerative  point  of  view. 
This  clause  entirely  eliminates  the  possibili- 
ty of  elasticity,  in  fact,  is  directly  respon- 
sible for  inflation.  The  notes  are  thus  kept 
in  circulation  after  their  work  has  been 
accomplished,  and  they  long  since  should 
have  been  retired.  No  reform  in  the  cur- 
rency laws  can  be  accomplished  while  this 
clause  remains  in  force.  Because  it  is  not 
profitable,  then,  the  banks  do  not  supply 
sufficient  notes  to  meet  the  crop-moving 
demand.  The  Government  notes  are  next 
resorted  to.  These,  however,  are  held  by  the 
banks  as  reserve  against  their  deposits,  the 
proportion  of  the  former  to  the  latter  being 
arbitrarily  fixed  by  the  National  Banking 
Law.  As  this  limit  is  approached  the 
banks  are  forced  to  provide  funds  by  dis- 
posing of  their  most  available  assets  and 
liquidating  the  short-term  loans.  Although 
the  country  districts  are  also  affected,  the 
greatest  strain  falls  upon  the  money  centres 
where  credits  must  be  reduced  wholesale 
and  the  rate  for  call  money  often  reaches 
exorbitant  figures. 

In  this  connection  it  is  worthy  of  note 
that  the  Bank  Act  does  not  require  the 
banks  in  Canada  to  carry  a fixed  reserve 
against  their  deposits.  Sound  banking, 
however,  does,  and  few  banks  will  be  found 
to  carry  in  their  own  vaults  a smaller  pro- 
portion of  reserve  than  ten  per  cent  of 
their  deposits.  In  many  cases  the  readily 
available  assets  will  amount  to  from  three 
to  four  times  this  ratio.  The  extra  demand 
for  cash,  during  the  moving  of  the  crops, 
is  supplied  almost  entirely  by  the  notes 
of  the  chartered  banks  and  thus  their  re- 
serves are  in  no  way  impaired.  Credit  is 


undisturbed  and  the  rate?  of  interest  and 
discount  remain  practically  unchanged. 

The  question  of  convertibility  of  bank 
notes  in  Canada  requires  little  comment. 
It  is  directly  connected  with,  in  fact  is 
accomplished  by,  the  daily  redemption  be- 
tween the  banks  already  described.  Notes 
presented  over  the  counter  must  be  paid  in 
gold  if  the  holder  so  desires,  but  this  de- 
mand is  seldom  made.  Even  in  the  case 
of  a failed  bank  the  note  holder  has  little 
cause  for  worry,  for,  from  the  date  of 
suspension  until  the  notes  are  redeemed, 
they  bear  interest  at  the  rate  of  five  per 
cent,  per  annum.  Instead  of  being  quoted 
below  par,  as  might  be  expected  under 
such  circumstances,  they  actually  sell  at  a 
premium. 

Profit  on  the  Canadian  Bank  Notes. 

It  is  extremely  profitable  to  take  out 
circulation  under  the  provisions  of  the  Bank 
Act.  A bank  commencing  business  will 
probably  find  difficulty  in  circulating  its 
notes  extensively  during  the  first  year  or 
so,  its  business  at  the  outset  being  small. 
However,  the  note  issue  increases  as  the 
bank  grows  in  strength  until  it  is  finally 
equal  to  the  paid-up  capital.  The  amount 
of  notes  in  circulation  is  practically  equiva- 
lent to  a deposit  without  interest.  There 
is  no  tax  on  the  issue,  and  the  banks  are 
not  required  to  pledge  bonds  against  the 
amount  outstanding,  as  is  the  case  in  the 
United  States,  nor  are  they  compelled  to 
make  a specific  pledge  to  carry  gold  as 
security.  The  profit,  then,  is  limited  to  the 
rate  of  interest  prevailing  in  the  different 
districts  and  should  be  fractionally  greater 
in  the  west.  Allowance  mu?st  be  made  for 
the  numerous  expenses  of  the  issue,  con- 
sisting of  the  cost  of  maintaining  redemp- 
tion agents,  engraving,  express  charges  or 
insurance,  etc.  The  loss  of  interest  entailed 
by  the  actual  reserve  in  gold  and  legal 
tenders,  w'hich  the  banks  through  ex- 
perience have  found  it  advisable  to  hold  for 
the  purpose  of  redemption,  should  also  be 
deducted.  The  net  profit,  however,  on  the 
bank  note  issue  in  Canada  is  variously  esti- 
mated at  from  four  to  five  per  cent.  A point 
worthy  of  note  is  the  economy  of  an  issue 
governed  by  such  laws.  The  notes  not  in 
circulation  remain  in  the  Treasury  ready 
for  use  at  a moment’s  notice  and  do  not 
become  a liability  until  actually  paid  over 
the  counter. 

It  must  be  said,  in  all  fairness,  that  the 
question  has  recently  been  discussed  as  to 
whether  or  not  the  note  issue  will  in  the 
future  be  adequate  during  the  height  of 
the  grain-moving  season  As  previously 
shown,  this  extra  strain  is  met  by  the  paid- 
up  capitals  of  the  various  banks,  being 
kept  greatly  in  excess  of  their  usual  amount 


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of  notes  in  circulation.  However,  in  times 
of  stress  or  panic  certain  conditions  might 
prevail  which  would  make  it  unwise  to 
offer  stock  to  the  shareholders.  It  has 
been  suggested  that  during  such  times  as  we 
have  just  passed  through  it  would  be  well 
to  have  power  to  issue  an  emergency  cur- 
rency. Probably  during  the  next  revision 
of  the  Bank  Act,  in  1911,  or  perhaps  even 
at  an  earlier  date,  such  a measure  will  be 
introduced.  From  this  it  must  not  be 
understood  that  the  bank-note  issue  in 
Canada  is  inadequate,  far  from  it,  for  so 
far  it  has  always  been  equal  to  the  demand 
and  any  such  amendment  as  the  foregoing 
would  be  merely  in  the  nature  of  an  extra 
precaution. 

Time  has  demonstrated  that  bank  notes 
in  Canada  are  absolutely  safe.  With  one 
unimportant  exception  occqring  in  the  early 
seventies  before  the  later  safeguards  were 
embodied  in  the  law  as  it  stands  to-day,  no 
bank  suspending  payment  ever  failed  to 
redeem  its  notes  in  full.  Unquestionably, 
the  volume  of  notes  in  existence  works  hand 
in  hand  with,  and  is  directly  dependent 
upon,  business  conditions.  This  feature  of 
elasticity,  it  has  been  shown,  is  directly 
due  to:  First,  the  business  demand,  coupled 
with  the  fact  that  it  is  profitable  to  the 
banks,  thus  causing  expansion;  and,  second, 
to  the  keen  competition  between  banks,  re- 
sulting in  quick  redemption,  which  is  an 
effective  curb  on  the  issue.  Doubtless  one 
of  the  most  far-reaching  provisions  of  the 
Bank  Act,  is  the  law  authorizing  its  re- 
vision at  regular  intervals.  It  is  due  to 
this,  more  than  to  any  other  feature,  that 
the  note  issue  of  the  Canadian  Chartered 
banks,  has  reached  its  present  state  of  per- 
fection. Such  legislation,  prompted  by  the 
far  sightedness  of  the  leading  bank  men, 
has  produced  a system  of  banking  in 
Canada  which  has  placed  it  amongst  the 
foremost  of  the  world  to-day. 

Asset  Currency  as  Applied  to  the  United 
States. 

It  is  evident  that  banking  reform  in  the 
United  States  has  not  kept  pace  with 
changing  conditions.  Banking  methods  as 
a whole,  and  especially  in  regard  to  the 
currency  question,  have  of  late  been  subject 
to  such  overwhelming  criticism  that  legisla- 
tion of  a remedial  nature  must  take  place 
at  an  early  date.  Although  the  Banking 
Law  was  amended  in  1900,  making  it  more 
attractive  for  the  banks  to  take  out  circula- 
tion, the  amendment  was  the  direct  result 
of  the  Government  to  benefit  by  a lower 
priced  bond  being  used  as  security.  Here 
again,  as  was  the  case  when  the  original 
law  was  passed,  we  have  an  example  of 
legislation,  prompted,  not  by  the  require- 
ments of  trade  and  commerce,  but  with  the 


end  in  view  of  reducing  the  interest  or 
the  national  debt.  Under  such  conditions,  it 
is  not  surprising  that  the  present  system  ot 
bank-note  circulation  has  failed  to  provide 
the  country  with  a currency  issue  of  an 
elastic  nature,  directly  governed  by  busi- 
ness demands.  The  Aldrich  bill  which  has 
recently  passed  the  Senate,  not  only  pro- 
vides for  an  emergency  currency  along 
somewhat  similar  lines,  but  places  its  stamp 
of  approval  upon  the  essential  points  of  the 
law  as  it  stands  to-day — & law  wrong  in 
principle,  and  one  which  should  be  speedily 
abolished.  At  best,  such  a measure  would 
be  of  value  in  times  of  panic  only,  and  in 
the  meantime  no  provision  has  been  made 
for  a sound  and  flexible  currency,  governed 
by  the  laws  of  demand  and  supply.  It 
would  seem  that  reform  of  a more  radical 
nature  were  necessary  in  order  that  this 
end  may  be  attained. 

The  Fowler  Bill  Approved. 

On  the  other  hand  the  proposed  Fowler 
bill  represents  a studied  endeavor  to  reform 
the  currency  laws,  based  directly  upon  the 
needs  of  the  business  community.  Its  prin- 
cipal features  have  already  met  with  the 
approval  of  many  of  the  leading  bank  men 
not  only  of  New  York,  but  throughout  the 
country  as  well.  It  has  been  claimed  that 
the  bill  attempts  too  much,  but  the  con- 
dition of  banking  in  the  United  States  today 
calls  for  a thorough  discussion  of  its 
underlying  principles,  and  no  reform  of 
any  account  can  be  accomplished  until  the 
currency  question  has  been  thoroughly 
thrashed  out  The  Fowler  bill  is  undoubt- 
edly an  important  step  in  this  direction. 
It  seeks  to  provide  for  a sound  and  elastic 
circulating  medium,  the  retirement  of  the 
present  bond-secured  circulation,  and  the 
elimination  of  the  Treasury  as  a disturbing 
element  to  the  banks  as  a whole.  It  is 
proposed  to  supply  the  country  with  an 
issue  of  bank-notes  secured  by  commercial 
paper  and  other  credits  or  assets  of  the 
banks.  Provision  is  also  made  for  the  de- 
posit with  the  Government  of  a guarantee 
fund  equal  to  five  per  cent,  of  the  notes 
outstanding.  In  order  that  the  redemption 
of  all  surplus  notes  may  be  prompt,  it  is 
proposed  to  divide  the  country  into  dis- 
tricts, with  a central  point  in  each,  to  be 
used  by  the  surrounding  banks  for  clear- 
ing purposes.  At  these  redemption  agencies 
the  banks  are  compelled  to  hold  in  lawful 
money,  as  reserve,  a certain  proportion  of 
their  notes  in  circulation,  the  ratio  varying 
with  respect  to  their  classification  as  central 
reserve,  reserve,  or  country  banks. 

The  chief  features  of  the  Fowler  bill  in 
regard  to  the  note  issue,  are  almost  identical 
in  principle  with  those  governed  by  the 
Bank  Act  in  Canada.  In  both  the  banks 


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ASSET  CURRENCY  IN  CANADA. 


65 


are  permitted  to  issue  notes  to  the  extent 
of  their  paid-up  capital,  although  the  Fow- 
ler bill,  under  certain  restrictions  provides 
for  an  emergency  issue  above  this  point. 
*ibe  security  in  both  cases  is  based  upon  the 
general  assets  or  credits  of  the  banks.  In 
the  Fowler  bill  provision  is  made  for  the 
bolding  by  the  banks  of  a fixed  reserve  in 
lawful  money,  not  exceeding  twenty-five 
per  cent  of  the  notes  outstanding,  while 
in  Canada  although  there  is  no  such  law, 
experience  has  demonstrated  the  necessity 
of  bolding  for  this  purpose  a certain  pro- 
portion of  legal-tender  notes  and  gold. 
The  five  per  cent  redemption  or  guarantee 
fund,  to  which  the  notes  of  an  insolvent 
bank  are  charged  should  the  other  assets 
be  insufficient,  corresponds  in  a measure 
with  the  Bank  Circulation  Redemption  Fund 
of  the  Canadian  system,  and  in  both  cases 
this  amount,  which  is  deposited  with  the 
Government,  is  interest-bearing.  As  in 
Canada,  provision  is  made  for  the  division 
of  the  country  into  sections  so  as  to  insure 
the  immediate  retirement  of  all  surplus 
notes.  At  these  redemption  agencies,  and 
at  the  counters  of  the  issuing  banks,  pay- 
ment must  be  made  in  gold  upon  demand. 
In  short,  should  the  Fowler  bill  become 
law,  the  national  banks  of  the  United  States 
would  possess  a note  issue  similar  to  that 
of  the  Chartered  Banks  in  Canada,  with  re- 
spect to  the  following: 

I.  Notes  issued  up  to  paid-up  capital. 

II.  Based  upon  a certain  proportion  of 
gold  as  reserve. 

III.  Secured  by  the  credit  and  assets 
of  the  issuing  bank. 

IV.  The  five  per  cent,  guarantee  fund 
deposited  with  the  Government. 

V.  The  establishing  of  redemption  agen- 
cies throughout  the  country. 

VI.  Notes  payable  in  gold  on  presen- 
tation. 

VII.  Double  liability  of  shareholders  as 
additional  security  to  notes. 

An  interesting  feature,  though  not  in 
relation  to  the  currency  question,  is  the 
provision  for  a guarantee  fund  as  security 
to  the  depositors.  It  is  surprising  that  such 
a clause  should  have  been  inserted  in  the 
Fowler  bill.  It  is  in  reality  as  reasonable 
to  insure  the  loans  of  a bank  as  the  de- 
posits; in  fact,  more  so,  for  in  the  event 
of  the  former  being  specially  secured,  the 
depositors  would  undoubtedly  be  paid  in 
full.  Deposits  are  the  foundation  of  bank- 
ing. They  are  the  result  of  confidence 
which  is  brought  about  by  the  integrity  and 
ability  of  bank  men.  Such  legislation  would 
place  all  banks  upon  a common  basis  re- 
gardless of  standing  and  efficiency.  Any 
provision  resulting  in  the  tendency  to  elim- 
inate such  characteristics  cannot  be  too 
strongly  condemned. 

5 


Safety  is  the  first  requisite  of  a note 
issue,  and  the  question  as  to  whether  the 
Fowler  bill  properly  secures  the  noteholder 
is  at  present  the  subject  of  much  discus- 
sion. The  five  per  cent,  fund  deposited 
with  the  Government  is  an  important  pro- 
vision. In  addition  to  the  security  thus 
afforded,  it  tends  to  draw  the  banks  closer 
together.  Any  depletion  of  the  fund  must 
be  made  good  by  the  banks  as  a whole,  and 
they  are  to  this  extent,  at  least,  directly  in- 
terested in  the  solvency  of  their  neighbors. 
The  holding  of  a certain  proportion  of  law- 
ful money  in  the  redemption  cities  is  an 
additional  safeguard,  but  the  main  security 
is  the  pledging  of  all  credits  or  assets 
against  the  notes  in  circulation.  But  at  this 
point  the  Fowler  bill  goes  further.  It  dis- 
tinctly states  that  the  'general  assets  of  the 
bank  shall  also  be  held  against  the  deposits, 
placing  both  liabilities  upon  the  same  basis. 
While  it  is  undisputed  that  they  are  similar 
with  reference  to  the  bank,  in  their  use 
to  the  public  the  difference  is  significant 
This  was  firmly  fixed  in  the  minds  of  those 
who  framed  the  National  Banking  Law  of 
1863  when  the  notes  were  made  at  least 
four  times  as  secure  as  the  deposits.  De- 
positors willingly  accept  the  obligation  of  a 
bank  of  their  own  choosing,  but  noteholders 
of  a comparatively  unknown  bank,  far  from 
the  point  of  redemption,  receive  these  ac- 
knowledgments of  debt  only  because  they 
are  absolutely  secure.  The  credit  of  the 
national  banking  system  would  be  little 
affected  by  the  failure  of  local  banks,  show- 
ing loss  to  depositors,  but  should  the  notes, 
scattered  throughout  the  country,  fail  of 
redemption,  the  uncertainty  and  distrust  of 
such  a note  issue  would  indeed  be  wide- 
spread. In  Canada  the  note  issue  is  the  first 
lien  upon  a bank’s  assets.  It  is  worthy  of 
note  that  in  the  proposed  reform  measure 
of  the  American  Bankers’  Association,  this 
safeguard  is  also  given  great  prominence. 
The  proportion  of  notes  to  deposits  is  so 
small  that  this  preference  is  not  marked, 
but  it  acts  as  a blanket  mortgage  toward 
the  note  issue.  If  the  present  bond  secured 
circulation  is  to  be  eliminated,  it  must  be 
replaced  by  one  equally  safe,  and  should 
such  a provision  as  the  foregoing  be  em- 
bodied in  the  Fowler  bill,  it  would  go  far 
towards  making  the  notes  absolutely  secure. 

Next  in  importance  to  security  comes  the 
question  of  elasticity.  It  is  evident  that 
the  Fowler  bill  has  made  ample  provision 
for  this  feature.  The  demand  for  notes 
is  directly  based  upon  the  requirements  of 
trade  and  commerce  and  the  supply  expands 
and  contracts  in  response  to  the  expansion 
and  contraction  of  business.  Notwithstand- 
ing the  two  per  cent.  tax.  the  issue  would 
be  profitable  to  the  banks,  and  this  in- 
centive to  take  out  circulation  would  tend 
to  keep  the  amount  outstanding  at  a high 


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THE  BANKERS  MAGAZINE. 


figure.  But  the  very  fact  of  the  banks 
having  this  idea  of  profit  in  mind  would 
cause  them  to  direct  their  efforts  towards 
immediately  retiring  the  notes  of  their 
competitors.  The  prompt  return  in  this 
manner  through  the  redemption  agencies, 
and  over  the  counter,  would  adequately  pre- 
vent inflation  and  the  note  issue  would  at 
all  times  be  automatically  adjusted  to  the 
country’s  needs.  The  notes  thus  retired 
would  be  held  in  readiness  for  a further 
call,  and  although  the  desire  and  power  to 
issue  are  always  present  as  far  as  the  banks 
are  concerned,  to  complete  the  transaction 
there  must  be  a demand  on  the  part  of  the 
public  for  actual  cash.  It  will  be  seen 
that  the  redemption  agencies  play  a most 
important  part  in  the  machinery  of  a note 
issue.  In  the  Fowler  bill  it  is  proposed  to 
divide  the  country  into  sections  with  a chief 
point  in  each,  where  the  notes  of  the  sur- 
rounding banks  are  to  be  redeemed.  These 
central  cities  must  be  so  situated  as  to  be 
not  more  than  twenty-four  hours  distant 
from  any  national  bank.  Should  the  details 
of  this  plan  be  prqperly  carried  out,  the 
redemption  facilities  would  doubtless  be 
equal  to  those  of  the  large  European  banks 
of  issue  and  the  banks  in  Canada  under  the 
branch  system  of  banking. 

A Flexible  Currency  Aids  Crop  Moving. 

While  the  value  of  a flexible  currency 
system  is  at  all  times  noticeable,  it  is  dur- 
ing the  crop-moving  period  that  its  useful- 
ness is  most  apparent.  The  tremendous  in- 
crease in  the  amount  of  cash  required  at 
this  season  is  at  presen*  met,  to  a great 
extent,  by  the  Government  issues,  held  by 
the  banks  as  reserve,  and  upon  which  their 
very  foundation  rests.  Any  reduction  be- 
low the  limit  fixed  by  law  results  in  curtail- 
ment of  credit  to  such  an  extent  as  to 
seriously  restrict  the  business  of  the  country 
as  a whole.  Under  a proper  system  of 
asset  currency  the  demand  for  cash  would 
be  almost  entirely  supplied  by  the  note 
issue,  thus  leaving  the  Government  notes 
and  gold  undisturbed  to  perform  their  duty 
as  reserve.  Reduction  of  credit  would  be 
unnecessary,  and  the  present  tendency  of 
skyrocket  rates  for  commercial  paper  and 
call  money  would  be  eliminated. 

Even  the  most  ardent  supporters  of  the 
Fowler  bill  cannot  hope  for  its  adoption 
in  detail,  but  it  is  undoubtedly  sound  in 
principle,  and  its  chief  features  should  be 
enacted  into  law.  Its  greatest  stumbling- 
block,  however,  is  the  present  system  of 
Government  finance,  especially  the  use  of 
bonds  as  security  to  bank  notes,  a system 
founded  when  the  credit  of  the  country  was 
impaired,  and  the  use  for  which  has  long 
since  disappeared.  The  public  is  daily  be- 
coming more  alive  to  the  dangers  of  a bond- 


secured  circulation,  and  should  it  become 
a question  for  the  count ry  to  decide,  as  is 
by  no  means  unlikely,  the  result  would  not 
remain  for  long  in  doubt. 

Its  use  in  other  countries  has  shown  the 
system  of  credit  currency  secured  by  com- 
mercial paper  and  other  assets  to  be  ab- 
solutely safe,  and  there  is  no  valid  reason 
why  it  should  not  be  applied  to  the  national 
banks  of  the  United  States  On  account  of 
the  large  number  of  banks,  however,  and 
many  with  small  capital  and  reserve  funds, 
it  would  be  well,  as  an  additional  precau- 
tion, to  make  the  note  issue  the  first  lien 
upon  a bank’s  assets.  Unquestionably  a 
circulating  medium  governed  by  such  laws 
would  fluctuate  directly  with  business  re- 
quirements, in  fact,  would  reflect,  in  volume, 
the  specific  demand  for  cash,  rising  and 
falling  at  all  times  as  a result  of  prevail- 
ing conditions.  Not  only  would  the  issue  in 
itself  show  a handsome  profit,  but  the  tills 
would  be  filled  with  a form  of  money,  rep- 
resenting no  previous  investment,  and  one 
which  would  not  figure  as  an  obligation  until 
actually  paid  out.  In  the  present  system 
this  till  money  is  responsible  for  the  cur- 
tailment of  lending  power  of  several  times 
the  amount  involved. 

With  proper  safeguards,  then,  “asset 
currency”  would  be  equal  in  safety  to  a note 
issue  secured  by  Government  bonds,  and 
in  regard  to  elasticity,  profit  and  economy 
immeasurably  superior.  Should  such  a sys- 
tem be  finally  adopted,  it  would  tend  to 
materially  correct  the  ills  which  exist  in 
the  present  system  of  banking  in  the  United 
States. 


A YEAR  OF  BIG  MINTAGE. 

NINETY  per  cent,  of  the  coinage  by  the 
United  States  in  the  fiscal  year  of  1908 
consisted  of  gold  eagles,  a coin  which 
probably  not  one  in  a hundred  people  sees  as 
often  as  once  a year.  Altogether  the  coin- 
age of  the  country  comprised  seventeen  dif- 
ferent varieties,  seven  of  which  were  for  the 
Philippine  Islands  in  pesos  and  centavos, 
and  one  of  which  of  the  same  denomination 
was  for  account  of  the  Mexican  Govern- 
ment. The  number  of  pennies  turned  out 
averaged  a little  less  than  one  for  each  in- 
habitant. 

The  total  coinage  for  continental  United 
States  was  $215,714,862.  This  has  been  one 
of  the  most  active  years  in  the  history  of 
national  minting.  Of  this  amount  $179,238,- 
337  were  in  gold  and  $16,532,477  in  silver, 
or  about  the  ratio  of  one  of  silver  to  twelve 
of  gold.  The  coinage  for  the  Philippine 
Islands  included  more  than  25,000,000  pieces 
valued  at  $18,121,825,  or  more  than  the  to- 
tal silver  coinage  for  the  United  States. 


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MUTUAL  GUARANTY  OF  DEPOSITS. 


By  H.  M.  P.  Eckardt. 


STUDENTS  of  banking  in  various  coun- 
tries will  be  interestedly  watching  the 
working  of  the  famous  Oklahoma  de- 
posit-guaranty  law  during  the  first  few 
years  of  its  existence.  Bankers  especially 
will  be  disposed  to  follow  closely  the  results 
of  such  failures  as  occur  amongst  the  banks 
contributing  or  participating  in  the  mutual 
guarantee.  Press  dispatches  state  that  the 
collapse  of  one  small  Oklahoma  guaranteed 
bank — the  Bank  of  Colgate — is  regarded  as 
furnishing  capital  for  the  advocates  of  a 
more  general  system  of  guarantee.  From 
the  meagre  details  that  have  been  published 
it  appears  that  this  little  institution  with 
deposits  of  $38,000,  was  ruined  “owing  to 
the  rank  mismanagement  of  the  officers.” 
"a lie  dispatch  goes  on  to  state:  “The  bank’s 
cash  feii  $22,000  short  of  the  amount  needed 
to  pay  off  the  depositors,  and  the  Bank 
Commissioner  drew  on  the  deposit  guaranty 
fund  for  the  amount  and  paid  off  every 
creditor.” 

Such  an  outcome  of  the  failure  of  a bank 
which  was  rankly  mismanged  would  un- 
doubtedly be  highly  satisfactory — for  its 
creditors.  As  they  got  their  checks  for  their 
rescued  deposits  they  would  be  disposed  to 
throw  up  their  caps  and  shout  for  the 
principle  of  deposit  guaranty.  For  them  it 
proved  an  excellent  thing.  They  had  en- 
trusted their  money  to  the  keeping  of  men 
who  were  not  capable  of  caring  for  it  well 
and  honestly;  and  when  the  inevitable  crash 
came  deposit  guaranty  saved  them  from 
harm. 

Who  Foots  the  Bill. 

But  there  is  another  side  to  the  matter. 
How  is  the  circumstances  regarded  by  the 
contributory  bankers  who  put  up  the  money 
which  went  to  pay  off  the  depositors  in  the 
Bank  of  Colgate?  It  happened  that  this 
first  failure  to  which  the  act  applied  was  of 
a small,  one  might  call  it  a tiny,  bank.  The 
next  one  to  occur  may  be  of  more  conse- 
quence. However,  let  us  follow  the  course 
of  the  payments  under  the  guarantee.  We 
have  seen  how  the  creditors  all  got  their 
balances.  The  money  which  they  were  paid 
would  first  be  charged  off  the  general  fund 
held  by  the  Bank  Commissioner.  After- 
wards the  charge  would  be  distributed  by 
assessments  amongst  the  individual  banks 
participating  in  the  guarantee.  As  the  law 
compels  each  one  to  maintain  in  the  fund 
a sum  equal  to  one  per  cent,  of  its  de- 
posits, and  as  that  one  per  cent,  would  be 
broken  into  for  the  purpose  of  paying  off 


depositors  in  the  failed  institution,  each  one 
would  have  to  remit  the  amount  of  its 
assessment.  The  only  practicable  way  of 
levying  the  assessment  would  be  pro  rata 
according  to  the  amounts  contributed  by 
each  member.  And  the  amounts  contributed 
by  each  member  would  be  according  or  pro- 
portionate to  the  amount  of  deposits  held 
by  it.  Thus  it  would  work  out  that  the 
bank  among  the  Oklahoma  guaranteed  banks 
that  carried  the  largest  amount  of  deposits 
would  be  required  to  pay  the  largest  share 
of  the  loss  occasioned  through  the  Colgate 
failure.  And  of  course  it  will  have  to  pay 
the  largest  share  of  all  the  other  losses  that 
occur. 

It  is  to  be  borne  in  mind  that  though  the 
contributory  banks  may,  as  permitted  by 
the  Oklahoma  law,  count  a part  of  the 
original  one  per  cent,  as  an  asset  for  bal- 
ance-sheet purposes,  they  would  be  obliged 
to  charge  straight  against  their  profits  or 
revenue  the  whole  of  such  fresh  assessments 
as  they  may  be  subsequently  billed  for. 
Thus  the  losses  are  to  fall  upon  the  stock- 
holders of  those  contributory  banks  that 
continue  to  be  “going”  concerns. 

In  every  case  where  the  guarantors  thus 
satisfied  the  depositors  of  a failed  bank 
they  would,  of  course,  acquire  a lien,  or  a 
right  to  rank  as  creditors  upon  the  property 
and  assets  of  the  failed  bank;  and  it  is 
certain  that  through  the  liquidation  of  these 
assets  they  would  be  able  to  reimburse 
themselves  to  a limited  extent  for  moneys 
advanced  by  them.  The  extent  of  these 
recoveries  would  depend  altogether  upon 
how  bad  w’ere  the  failures  in  which  they 
were  involved.  In  no  case  could  they  ulti- 
mately come  out  better  than  the  depositors 
themselves  would  have  fared  had  there  been 
no  guarantee.  Thus,  if  a guaranteed  bank 
fails  and  its  assets  only  realize  enough  to 
pay  its  depositors  fifty  cents  on  the  dollar, 
then  the  guaranteeing  banks  in  the  aggre- 
gate would  lose  a sum  equal  to  fifty  per 
cent,  of  the  failed  bank’s  deposits. 

The  fact  of  the  guarantee  does  not  elim- 
inate or  reduce  the  losses  from  bad  bank- 
ing; it  merely  transfers  them  to  other 
shoulders.  As  everybody  knows  that  it 
takes  several  years  to  liquidate  the  average 
failed  bank  it  is  quite  easy  to  see  that  a 
few  break-downs  of  guaranteed  banks  hav- 
ing goodsized  deposits  would  assuredly  re- 
sult in  entailing  a very  inconvenient  lock-up 
of  funds  upon  the  other  contributory  banks. 
That  contingency  would  have  to  be  faced 
even  in  the  unlikely  eventuality  of  the  failed 


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banks  ultimately  liquidating  so  satisfac- 
torily as  to  pay  their  creditors  in  full. 

Restrictions  on  Banking — Better  Exam- 
inations. 

So  one  of  the  most  important  questions 
in  connection  with  any  such  plan  of  guar- 
antee is  “How  will  it  affect  the  number  and 
result  of  bank  failures?”  In  connection 
with  the  going  into  effect  of  the  Oklahoma 
law  some  special  restrictions  and  safeguards 
were  placed  about  banking  operations;  also 
it  is  provided  that  banks  joining  the  guar- 
antee are  to  be  examined  specially.  If  there 
should  be  a decrease  in  bank  failures  in 
that  state  it  will  be  reasonable  to  say  that  it 
is  due  to  the  more  careful  watch  kept  on  the 
banks  and  to  the  restrictive  laws  rather 
than  to  the  fact  of  the  guarantee.  It  is  not 
easy  to  see  how  the  guarantee  itself  can 
effect  reductions  in  the  number  of  failures 
or  make  such  failures  as  do  occur  have 
more  favorable  results.  It  would  undoubt- 
edly have  a considerable  effect  that  way  if 
the  responsible  guaranteeing  banks  enjoyed 
any  sort  of  control  or  supervision  over  the 
operations  of  each  individual  institution 
that  came  under  their  guarantee. 

It  is  a much  more  important  action  than 
people  in  general  appear  to  think  for  a 
bank  to  guarantee  the  liabilities  of  another 
bank. 

When  the  Barings  suspended  in  1890  the 
Bank  of  England  assumed  their  liabilities — 
a number  of  the  joint  stock  banks  of  Lon- 
don joined  in  guaranteeing  the  Bank  of 
England  against  loss.  This  action  was 
taken  after  the  interested  parties  had  made 
a close  and  careful  examination  of  the  Bar- 
ing assets.  Also,  in  Canada,  within  the  last 
two  years  the  associated  banks  assumed  the 
liabilities  of  the  Ontario  and  Sovereign 
banks,  but  not  before  they  had  subjected 
the  assets  to  the  closest  and  most  careful 
scrutiny. 

It  may  be  objected  that  these  cases 
should  not  be  cited  as  bearing  upon  the 
subject  of  United  States  banks  entering 
upon  a guarantee  of  the  deposits  of  other 
going  United  States  banks.  They  are  cited 
as  examples  of  bankers  following  the  very 
necessary  and  proper  course  of  informing 
themselves  thoroughly  as  to  the  exact  condi- 
tion prevailing  in  concerns  over  which  their 
guarantee  was  to  be  placed.  In  England, 
and  in  Canada  too,  instances  are  occurring 
from  time  to  time  of  one  bank  taking  over 
or  absorbing  the  business  of  another  bank. 
This  is  never  done  until  the  to-be-absorbed 
institution  is  severely  examined  in  every 
detail. 

When  the  absorbing  bank  knows  the 
other's  condition  then  it  assumes  its  liabili- 
ties, takes  full  possession  and  enjoys  the 
profits  from  the  business  acquired.  Under 


the  Oklahoma  system  of  mutual  guarantee, 
or  under  any  like  it,  the  good  banks  arts 
obliged  to  place  their  valuable  guarantee 
blindly  upon  a lot  of  institutions  about 
whose  condition  they  know  little  or  noth- 
ing. In  other  words  they,  in  association, 
take  pretty  much  all  the  risk  which  a 
British  or  Canadian  bank  takes  when  it 
assumes  the  liabilities  of  another  bank,  but 
they  know  little  or  nothing  about  the  busi- 
ness for  which  they  have  become  liable; 
they  have  no  control  or  supervision,  and  no 
share  in  the  profits;  and  thus  they  are  not 
able  to  protect  themselves  properly,  and 
they  do  not  get  the  increased  profits  to 
which  the  assumption  of  an  added  liability 
should  entitle  them. 

The  only  thing  that  causes  them  for  a 
moment  to  consider  such  a scheme  is  the 
fact  that  the  guarantee  is  to  be  shared  in 
by  so  many  banks  and  by  such  a large  ag- 
gregation of  capital  and  resources.  Each 
banker  in  favor  of  it  reasons  that  his  own 
particular  share  of  the  losses  will  probably 
be  small  and  that  his  deposits  will  likely 
show  a satisfactory  increase.  And  of  course 
it  goes  without  saying  that  the  banks  whose 
standing  and  credit  were  not  as  strong  as 
they  might  be  would  be  apt  to  favor  a 
scheme  calculated  particularly  to  benefit 
themselves. 

If  it  were  a matter  of  any  individual 
banker  entering  into  a mutual  arrangement 
with  another  banker,  perhaps  located  in  a 
neighboring  state,  whereby  each  one  guar- 
anteed the  other’s  deposits  both  parties 
would  want  to  be  well  satisfied  as  to  what 
was  being  undertaken,  and  as  to  what  would 
be  the  probable  gain  or  loss  before  the 
treaty  was  signed.  Yet  the  same  principle 
is  at  stake  as  in  the  case  of  mutual  guar- 
antee in  which  all  banks  participate. 

After  the  panic  of  1893  the  depreciation 
in  securities,  in  commodities,  real  estate  and 
other  property  caused  a very  heavy  increase 
in  the  number  and  importance  of  banking 
failures.  There  is  every  reason  to  expect 
that  the  depreciation  in  securities,  and  in 
other  properties  which  the  banks  own  or 
have  advanced  against,  following  the  panic 
of  1907  will  cause  an  increase  of  failures 
during  the  years  immediately  after  the 
panic.  Since  1908  began,  quite  a nunjber  of 
failures,  some  of  them  important,  have  oc- 
curred. The  risk  attending  any  general  or 
indiscriminate  guarantee  is  therefore  greater 
at  the  present  time  than  the  record  of  bank 
failures  during  the  last  eight  years  or  so 
appears  to  indicate. 


A SAVINGS  BANK. 

AN  Irishman  describes  a savings  bank 
as  a place  where  you  can  deposit 
money  today,  and  draw  it  out  tomor- 
row by  giving  a week’s  notice. — Exchange . 


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THIS  department  is  conducted  in  the  interests  of  the  American  Institute  of  Bank- 
ing. From  time  to  time  articles  of  special  value  to  members  of  the  Institute 
will  appear  here  and  it  is  intended  to  publish  as  much  news  of  the  various  chap* 
ten  as  possible.  It  is  hoped  that  each  chapter  will  appoint  someone  whose  regular  duty 
it  shall  be  to  correspond  with  The  Bankers  Magazine  for  this  purpose. 

Group  and  individual  photographs  of  officers  and  members,  photographs  of  chapter 
rooms,  accounts  of  banquets,  debates,  speeches  and  chapter  progress  are  desired  and  practical 
suggestions  and  discussions  are  solicited  from  all  members  of  the  Institute.  Manuscripts 
and  photographs  must  reach  us  by  the  25th  of  the  month  to  be  in  time  for  the  following 
month's  issue. 


ON  TO  PROVIDENCE. 


Everything  is  Ready  for  what  Promises  to  be  the  Institute’s  Most  Successful 
Convention.— Forecasts  by  Committee  Chairmen. 


ALL  indications  are  that  the  sixth  annual 
convention  of  the  American  Institute 
of  Banking  at  Providence,  R.  I.,  July 
23,  24,  and  25,  will  be  the  biggest  and  per- 
haps the  most  important  convention  since 
the  organization  of  the  Institute. 

President  A.  Waller  Morton,  of  the 
Associated  Chapters,  makes  this  ante-con- 
vention statement: 

Judging  from  the  reports  which  I have  re- 
ceived from  the  chairmen  of  the  several 
committees.  I have  every  reason  to  believe 
that  the  delegates  to  this  convention  will 
derive  as  much  benefit,  if  not  more,  than 
they  have  at  any  previous  one. 

A glance  at  the  list  of  speakers  who  will 
address  us,  as  outlined  by  Chairman  W.  I. 
Dey,  guarantees  that  this  portion  of  the  pro- 
gram will  be  most  interesting  and  in- 
structive. 

The  educational  committee  will  present  a 
report  which  will  contain  much  food  for 
thought  by  every  delegate  present.  Tbe 
time  which  has  heretofore  been  utilized  by 
the  reading  of  papers  by  chapter  men  will 
be  devoted  to  an  open  debate  on  some  of 
the  currency  reform  measures  which  are  now 
receiving  so  much  attention.  This  feature 
will  be  conducted  by  the  educational  com- 
mittee, and  if  for  no  other  reason  than  the 
opportunity  which  it  will  afford  many  of  the 
delegates  to  stand  up  and  express  their 
views,  should  prove  most  beneficial. 

The  annual  debate  will  be  between  teams 
from  Minneapolis  and  Pittsburg  Chapters,  on 
the  subject.  “Resolved,  That  all  banking 
institutions  in  New  York  city  be  required  to 
keep  a larger  cash  reserve.” 

Providence  Chapter  has  mapped  out  enter- 
tainments for  us  in  a most  liberal  manner. 
On  Thursday  afternoon  they  take  us  to  New- 
port, a city  whose  residents  probably  repre- 
sent more  wealth  than  those  of  any  other 
city  of  the  same  size  in  the  world. 


Friday  afternoon  they  will  prove  to  us  the 
delights  of  a good  old-fashioned  Rhode 
Island  clam-bake,  and  having  given  us  an 
opportunity  to  feast  the  inner  man,  they 
will  then  give  us  an  opportunity  to  feast 
the  eyes  upon  the  beauties  of  Roger  Wil- 
liams Park.  Saturday  evening  they  will  cap 
the  climax  by  entertaining  us  at  a banquet 
at  Churchill  House. 

Pursuant  to  instructions  from  the  board 
of  trustees,  a new  constitution,  providing 
for  the  chapters  to  assume  the  management 
of  the  Institute,  was  presented  at  the  De- 
troit convention,  and  after  careful  consid- 
eration wras  approved,  with  some  few 
amendments. 

This  constitution,  as  amended,  has  since 
been  approved  by  the  board  of  trustees  of 
the  Institute,  and  by  the  executive  council 
of  the  American  Bankers’  Association,  with 
the  single  amendment  by  the  latter  body  to 
the  effect  that  any  amendments  to  our  con- 
stitution must  receive  their  approval  before 
becoming  operative. 

It  will  be  seen  from  Article  VII.,  Section 
2,  that  the  chairman  of  our  executive  coun- 
cil must  be  duly  qualified  to  represent  the 
Institute  before  the  American  Bankers’  Asso- 
ciation. It  would  seem  that  the  natural 
outgrowth  of  this  situation  would  be  for 
the  Institute  to  be  made  a section  of  the 
American  Bankers’  Association,  with  this 
one  representative  on  their  council. 

Speaking  in  a personal  capacity,  and  not 
officially,  I desire  to  say  that  it  has  been 
said  to  me  that  the  American  Bankers’ 
Association  would  likely  look  with  favor 
upon  such  a proposition  coming  as  a re- 
quest from  the  Institute.  Why  should  we 
not  make  the  request?  What  more  digni- 
fied position  could  we  possibly  hope  to  at- 
tain than  a section  of  the  American  Bank- 
ers’ Association? 

It  has  been  asked  why  we  allow  them  to 
support  us,  but  I do  not  feel  that  they  are 
supporting  us  when  we  are  paying  over 
fifty  per  cent,  of  the  expense  of  our  main- 
tenance. And  again,  are  not  the  banks  in- 


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GEO.  A.  JACKSON  ARTHUR  A.  BRIGGS 

Newly  Elected  President  of  Chicago  Chapter.  First  National  Bank.  Vice-President  Chicago 

Chapter. 


GEO.  R.  MARTIN 
Treasurer  Chicago  Chapter 


70 


CHARLES  G.  FISHER 
Secretary  Chicago  Chapter. 


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AMERICAN  INSTITUTE  OF  BANKING. 


71 


directly  as  much  benefited  as  we  oursejves? 
L therefore,  claim  that  the  two  organiza- 
tions should  remain  in  perfect  accord  and. 
to  my  mind  the  section  idea  is  the  best 
solution  of  the  problem. 

In  conclusion.  I respectfully  ask  every 
delegate  to  give  this  matter  careful  and 
deliberate  consideration,  so  that  when  we 


at  1.30  P.  M.,  passing  down  west  passage 
around  Beaver  Tail.  Carriages  will  be  taken 
for  a ten -mile  drive  on  arrival  in  Newport. 
Steamer  will  leave  Newport  at  6.30  P.  M., 
Fail  being  extended  through  the  evening, 
arriving  in  Providence  about  11  P.  M.  Col- 
lation served  on  homeward  trip.  Music 
furnished  by  Hawes  orchestra. 


GOVERNOR  JAMES  H.  HIGGINS,  OF  RHODE  ISLAND 
Who  Will  Speak  at  the  Banquet. 


gather  in  Providence  we  may  decide  it  to 
the  best  advantage  of  all  concerned. 

The  Local  Arrangements. 

W.  A.  Havens  reports  on  the  local  ar- 
rangements at  Providence  as  follows: 

The  Narragansett  Hotel  has  been  selected 
as  convention  headquarters,  and  the  ses- 
sions of  the  convention  will  be  held  in  Elks’ 
Hall,  126  Mathewson  street.  Following  is 
an  outline  of  the  local  arrangements: 

Wednesday,  July  22  — Pre-convention 
smoker  at  Keith  Hall,  260  Westminster 
street,  7 to  11  P.  M. 

Thursday,  July  23— Steamer  Warwick  to 
Newport.  Leaves  foot  of  Crawford  street, 


Friday,  July  24 — Steamer  from  foot  of  Hay 
street,  for  Field’s  Point  at  6 P.  M.,  where  a 
genuine  Rhode  Island  clam -bake  will  be 
served.  Return  to  Providence  at  6.20  P.  M. 
Special  oars  at  landing  for  Rocky  Point  and 
return  to  Roger  Williams  park.  Band  con- 
cert at  park.  Dancing  in  casino,  10  to  12. 
Music,  Hope  orchestra. 

Saturday.  July  25 — Banquet  at  Churchill 
House  at  7 P.  M.  Music,  Fay’s  orchestra; 
Bowen  R.  Church,  cornet  soloist.  The  Or- 
pheus Quartet.  Ladies’  theatre  party  at 
Keith’s,  at  8 P.  M. 

The  programme  of  speakers  as  announced 
by  Chairman  Dey  is  as  follows: 

On  Thursday  morning  the  Hon.  Patrick  J. 


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AMERICAN  INSTITUTE  OF  BANKING. 


73 


McCarthy.  Mayor  of  Providence,  will  make 
the  address  of  welcome. 

Prof.  J.  C.  Monaghan,  ex-chief  of  Division 
of  Consular  Reports,  Department  of  Com- 
merce and  Labor,  who  made  such  an  able 
address  at  the  banquet  in  Detroit  last  year, 
will  speak  Thursday  morning  on  the  subject, 
“America  and  Her  Young  Men." 

Henry  Clews,  of  New  York,  one  of  the 
country’s  foremost  bankers,  will  speak  to 
us  Friday  morning,  his  subject  being,  “The 
Financial  and  Trade  Situation  Comprehen- 
sively Reviewed.”  As  Mr.  Clews  is  con- 
sidered an  authority  on  questions  of  finance, 
a most  instructive  address  may  be  expected. 

Saturday  morning  our  old  friend  E.  D. 
Hulbert,  vice-president  of  the  Merchants 
Loan  and  Trust  Company,  of  Chicago,  has 
kindly  consented  to  be  with  us  and  will 
speak  on  the  subject  “Our  Banking  System.” 

Our  banquet  promises  to  be  most  enjoy- 
able. We  have  been  so  fortunate  as  to  se- 
cure the  Hon.  Rathbone  Gardner,  president 
of  the  Union  Trust  Company,  of  Providence, 
as  our  toastmaster.  Mr.  Gardner  has  the 
reputation  of  being  a pastmaster  in  the  art 
of  presiding  at  banquets. 

John  T.  P.  Knight,  secretary  and  treas- 
urer of  the  Canadian  Bankers'  Association, 
and  manager  of  the  Montreal  clearing-house, 
who  is  famed  for  his  after-dinner  speeches, 
will,  as  he  says,  make  an  effort  not  to  bore 
those  who  attend,  and  the  subject  of  his 
remarks  will  be  “Matured  Obligations.” 

Governor  James  H.  Higgins  of  Rhode 
Island  has  accepted  our  Invitation,  and  we 
are  looking  forward  to  having  him  with  us 
at  the  banquet. 

We  shall  also  have  the  pleasure  of  listen- 
ing to  O.  H.  Cheney,  an  old  New  York 
Chapter  man,  who  has  recently  been  ap- 
pointed deputy  superintendent  of  banking  in 
New  York  state. 

Two  other  prominent  men  have  signified 
their  desire  to  be  with  us  at  the  banquet, 
but  we  cannot  positively  announce  their 
names  at  this  time. 

W.  A.  Prendergast  of  New  York  city,  who 
is  an  expert  on  credits,  and  an  exceptionally 
eloquent  speaker,  with  an  inexhaustible  fund 
of  good  stories.  His  subject  will  be  “Public 
Sentiment  and  Currency  Reform.” 


Transportation  Rates. 

A rate  of  a fare  and  three-fifths  has 
been  offered  to  delegates  by  the  Trunk  Line 
Association. 

Other  rate  concessions  are:  A fare  and  a 
third  round  trip  from  points  in  New  Eng- 
land and  Eastern  Canada,  and  a rate  of  a 
fare  and  three-fifths  for  the  round  trip 
from  points  in  the  territory  of  the  Trunk 
Line  Association,  which  is  New  York,  New 
Jersey,  Pennsylvania  east  of  Pittsburg, 
Delaware,  Maryland,  West  Virginia,  and 
Northern  Virginia. 

No  special  rates  have  been  granted  from 
other  parts  of  the  country.  The  committee 
is  informed,  however,  that  in  the  territory 
of  the  central  and  western  passenger  asso- 
ciations a rate  of  about  two  cents  a mile 
will  be  in  effect,  and,  further,  that  from  a 
great  many  points  in  the  central,  western, 
and  southwestern  states  an  appreciable  sav- 
ing may  be  made  by  taking  advantage  of  the 
summer  excursion  rates  that  will  prevail. 

In  connection  with  the  special  rates  in 
the  eastern  territory,  already  mentioned, 
it  should  be  said  that  return  tickets  under 


this  plan  are  limited  to  about  three  days, 
are  good  for  return  only  over  the  same  line, 
and  cannot  be  obtained  unless  100  or  more 
certificates  are  held.  The  rates  are  granted 
under  the  certificate  plan.  The  full  fare  is 
paid  on  the  trip  to  Providence,  and  if  the 
reduced  rate  is  desired  a certificate  must 
be  obtained  from  the  ticket  agent  at  the 
starting  point.  If  100  of  these  certificates, 
issued  by  the  Eastern  Canadian,  the  New 
England,  and  the  Trunk  Line  associations 
are  held  by  delegates  at  the  convention,  the 
holders  of  the  certificates  may  obtain  the 
reduced  rate  of  a third  or  three-fifths  fare, 
as  the  case  may  be,  for  the  return  trip 
within  the  territory  of  these  associations. 

It  may  be  possible  for  the  delegates  from 
the  states  in  the  territory  of  the  Trunk  Line 
and  New  England  associations  to  co- 
operate, and  by  that  means  get  the  benefit 
of  these  rates;  but,  on  account  of  the  re- 
turn limit,  the  restriction  as  to  the  return 
trip,  the  short  distance  for  which  the  rates 
are  available,  and  the  small  saving  in  fare, 
it  is  likely  that  the  delegates  from  the 
central,  western,  southern  and  southwestern 
states  and  from  all  points  west  of  New 
York  and  Pennsylvania  will  not  find  it 
worth  while  to  take  advantage  of  them. . 


Chicago’s  Special  Train. 

A “Convention  Special”  train  will  leave 
Chicago,  Tuesday,  July  21,  from  the  Park 
Row  and  12th  street  station  at  1 p.  m.  over 
the  Michigan  Central  Railroad.  The  train 
will  consist  of  Buffet-library-baggage  car,  a 
diner,  a la  carte  service,  and  pullmans, 
and  will  be  first-class  in  every  particular. 
The  route  of  the  train  will  be  via  Michigan 
Central  to  Buffalo,  New  York  Central  to 
Albany,  Boston  & Albany  to  Worcester,  and 
New  York,  New  Haven  & Hartford  R.  R. 
to  Providence.  The  trip  is  to  be  without 
change  of  cars,  arriving  there  early  Wed- 
nesday afternoon,  July  22 

Owing  to  the  lack  of  any  material  gen- 
eral reduction  in  railroad  rates  for  the  con- 
vention, Chicago  Chapter’s  delegation  has 
selected  the  above  fast  all-rail  route,  and 
invites  the  entire  delegations  from  the  fol- 
lowing cities  to  share  with  us  these  special 
transportation  facilities:  Appleton,  Daven- 

port, Decatur,  Des  Moines,  Duluth,  Eau 
Claire,  Fond  du  Lac,  Hastings,  Neb.,  In- 
dianapolis, Kansas  City,  La  Crosse,  Little 
Rock,  Ark.,  Los  Angeles,  Milwaukee,  Min- 
neapolis, Oakland,  Oshkosh,  Peoria,  Pine 
Bluff,  Ark.,  St.  Joseph,  Mo.,  St.  Louis,  St. 
Paul,  San  Francisco,  Seattle,  Spokane, 
Springfield,  111.,  Superior,  Wis.,  Terre 
Haute,  Ind.,  Detroit,  Mich.,  and  all  dele- 
gates and  friends  from  the  state  of  Mich- 
igan. 

The  visiting  delegations  upon  their  ar- 
rival at  the  Grand  Pacific  Hotel,  Chicago, 


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THE  BANKERS  MAGAZINE 


will  be  met  by  on  entertainment  committee. 
Coaches  will  be  provided  to  convey  the 
local  delegations  and  guests,  also  hand  bag- 
gage, from  the  Grand  Pacific  Hotel  to  the 
train.  It  is  most  important  that  those  who 
desire  accommodations  reserved  for  them 
on  the  train  should  make  application  stat- 
ing the  number  in  your  party,  at  the  earliest 
possible  date,  to  George  A.  Jackson,  Con- 
tinental National  Bank,  Chicago,  chairman 
transportation  committee  of  convention, 
who  will  assign  space  and  advise  you  of 
your  reservation,  also  gladly  furnish  any 
additional  information. 

The  committee  of  the  Chicago  delegation 
consists  of:  H.  E.  Ellefson,  secretary,  Com- 
mercial National  Bank;  C.  Frank  Spearin, 
Corn  Exchange  National  Bank;  Frank  C. 
Nason,  First  National  Bank. 


Convention  Committees. 

The  convention  committees  are  as  follows: 

Badge  and  registration — Allen  H.  Newton, 
chairman,  Connecticut  Trust  and  Safe  De- 
posit Co.,  Hartford. 

Debate  committee — Clarence  Evans,  chair- 
man, National  Union  Bank,  Baltimore;  F.  B. 
Devereaux.  National  Savings  & Trust  Co., 
Washington,  D.  C. ; George  B.  Irrick,  Ex- 
change State  Bank,  Stuart.  Iowa:  E.  A. 

Fitzpatrick,  Miners  Savings  Bank,  Pittsburg. 
Pa. ; C.  J.  Shepherd,  American  National, 
Indianapolis. 

Education  — Alexander  Wall,  chairman. 
First  National.  Milwaukee;  James  D.  Gar- 
rett, Central  Savings.  Baltimore;  H.  S.  An- 
drews, Garfield  National,  New  York  City; 
Blake  S.  Raplee.  Union  National,  Cleveland; 
Edwin  H.  Green,  Central  National,  Kansas 
City. 

Hotel  and  banquet — G.  A.  Harrington, 
chairman,  Rhode  Island  Hospital  Trust  Com- 
pany, Providence;  M.  H.  Laundon,  Society 
for  Savings,  Cleveland. 

Membership — G.  Peter  Jones,  chairman. 
Merchants  National,  Richmond;  D.  W. 
Hakes,  Springfield  Institute  for  Savings, 
Springfield,  Mass.;  Geo.  A.  Schulze.  West 
End  Bank  & Trust  Co.,  Cincinnati:  Fred  W. 
Ellsworth,  First  National,  Chicago;  R.  S. 
Hecht,  Hibernian  Bank  & Trust  Co.,  New 
Orleans. 

New  business — E.  S.  Eggers,  chairman. 
Union  National,  Pittsburg;  John  Henderson, 
National  Bank  of  Rochester.  New  York; 
Claude  A.  Philbrick,  First  National  Bank, 
Seattle,  Wash.;  S.  L.  St.  Jean,  National 
Bank  of  Commerce,  St.  Douis;  H.  G.  Ralm, 
National  Exchange  Bank,  Milwaukee.  Wis. 

Programme — W.  MoK.  Stowell,  chairman, 
Lincoln  National  Bank,  Washington;  H. 
Howard  Pepper,  Industrial  Trust  Co.,  Provi- 
dence; Wm.  S.  Evans,  care  Rufus  Waples, 
banker,  Philadelphia;  A.  L.  Roth,  Second 
National.  St.  Paul;  W.  A.  Wilkinson,  Mer- 
cantile Trust  Co..  St.  Louis. 

Speakers— W.  I.  Dey,  chairman,  Peoples 
Bank,  New  York;  J.  C.  Loomis.  Aetna  Na- 
tional, Hartford;  J.  G.  Sonneborn,  Ninth 
National,  Philadelphia;  Dean  Clark,  Citizens 
National.  Vandergrift,  Pa.;  E.  P.  Vander- 
berg,  National  Bank  of  Commerce.  Detroit. 

Transportation — George  A.  Jackson,  chair- 
man, Continental  National  Bank.  Chicago; 
R.  G.  Lowe.  Bank  of  Portsmouth,  Va. ; H.  L. 
Wilcox,  National  Bank  of  Commerce,  Provi- 
dence; A.  J.  Duerr,  Bank  of  Buffalo;  LeRoy 
H.  Civille,  First  National  Bank,  Los  Angeles. 

The  press  committee.  C.  F.  Spearin,  Corn 
Exchange  National  Bank,  Chicago,  chair- 
man, consists  of  the  presidents  of  all  chap- 
ters 


The  Official  Program. 

The  official  program  for  the  convention  is 
as  follows: 


WEDNESDAY,  July  22. 

7 to  11  P.  M.  Keith  Hall. 

Smoker. 

THURSDAY,  JULY  23. 

9.30  A.  M.  Elks’  Hall. 

Invocation,  Rev.  L.  L.  Henson,  D.D. 

Address.  Hon.  P.  J.  McCarthy,  Mayor  of 
Providence. 

Address,  Prof.  J.  C.  Monaghan  of  Notre 
Dame  University.  Subject:  America 

and  Her  Young  Men. 

Papers  by  Institute  Members. 

1.30  P.  M.  Steamer  Warwick  to  Newport. 

Leaves  foot  of  Crawford  street,  passing 

down  West  Passage  around  Beaver 
Tail. 

Carriages  will  be  taken  for  Ten  Mile 
Drive  on  arrival  in  Newport. 

Steamer  will  leave  Newport  at  6.30  P. 
M.,  sail  being  extended  through  the 
.evening,  arriving  in  Providence  about 
11  P.  M. 

Collation  served  on  homeward  trip. 

Music  furnished  by  Hawes  Orchestra. 

FRIDAY,  JULY  24. 

9.30  A.  M.  Elks’  Hall. 

Invocation.  Rev.  George  W.  Kent. 

Address,  Henry  Clews,  Esq.,  of  New 

York. 

Papers  by  Institute  Members. 

2.30  P.  M.  Elks’  Hall. 

Convention  Debate.  Subject:  Resolved, 
That  all  banking  institutions  in  New 
York  City  be  required  to  keep  a larger 
cash  reserve.  Contestants,  affirmative 
— Pittsburg  Chapter;  negative — Minne- 
apolis Chapter.  Judges,  Hon.  Frederic 
H.  Jackson,  Hon.  Joshua  M.  Addeman, 
Lewis  A.  Waterman,  Esq. 

5 P.  M.  Steamer  from  Foot  of  Hay  Street 
for  Field’s  Point. 

Where  a genuine  Rhode  Island  clam- 
bake will  be  served.  (Complimentary 
to  delegates  only.) 

Return  to  Providence  at  6.20  P.  M. 

Special  Cars  at  Landing  for  Rocky  Point 
and  Return  to  Roger  Williams  Park. 

Band  Concert  at  Park. 

Dancing  in  Casino,  10  to  12. 

Music,  Hope  Orchestra. 

SATURDAY,  JULY  25. 

9.30  A.  M.  Elks’  Hall. 

Invocation.  Rev.  Edward  S.  NInde. 

Address,  E.  D.  Hulbert,  Esq.,  of  Chica- 
go. Subject:  Our  Banking  System. 

Business  Session. 

Election  of  Oincers  and  members  of  Ex- 
ecutive Council. 

Selection  of  Convention  City  for  1909. 

7 P.  M.  Churchill  House. 

Banquet.  Toastmaster,  Hon.  Rathbone 
Gardner.  Speakers:  John  T.  P.  Knight. 
Esq.,  Secretary  Treasurer  Canadian 
Bankers  Association,  Manager  Mont- 
real Clearing  House.  O.  H.  Cheney, 
Esq.,  Deputy  Superintendent  of  Bank- 
ing, New  York.  W.  A.  Prendergast, 
Esq.,  of  New  York.  Hon.  George  H. 
Utter,  former  Governor  of  Rhode 
Island. 

Music — Fay’s  Orchestra,  Bowen  R. 
Church,  Cornet  Soloist;  The  Orpheus 
Quartet. 

8 P.  M.  Ladies’  Theatre  Party  at  Keith’s. 

The  dinner  at  Field’s  Point  is  the  special 
offering  of  members  of  Providence  Chapter 
to  the  delegates.  Other  entertainment  is 
provided  through  the  courtesy  of  the  bank- 
ing institutions  of  Providence  and  the  Prov- 
idence Clearing  House  Association. 


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THE  AMERICAN  INSTITUTE  OF  BANKING 


Address  Given  Before  the  Washington  State  Bankers’  Association,  June  18,  1908,  by 
W.  F.  Pauli,  Trust  Officer  of  the  Union  Savings  & Trust  Co.,  Seattle. 


IT  may  seem  to  some  of  the  older  bankers 
present,  an  act  of  presumption  on  my 
part  to  assume  to  address  this  honorable 
body  upon  any  subject  yrhatever,  but 
if  you  find  it  is  presumption.  I trust  you  will 
excuse  it  because  of  the  very  deep  interest 
I feel  in  the  subject  assigned  to  me,  and 
because  of  its  very  great  importance  to 
yourselves  and  the  country  at  large. 

The  American  Institute  of  Banking  is  now 
in  the  eighth  year  of  its  existence.  It  was 
organized  in  1900,  by  a committee  appointed 
at  the  national  convention  of  the  American 
Bankers’  Association,  for  the  purpose  of 
drawing  closer  together  in  an  educational 
and  social  way.  those  employed  in  the  busi- 
ness of  banking.  It  will  not  be  necessary  for 
me  to  go  into  a retrospective  history  of  the 
organization,  or  details  of  its  subsequent 
management,  as  undoubtedly  you  know  as 
much  about  it  as  I.  It  might  be  w^ll  to 
remind  you.  however,  that  it  was  a desire 
to  educate  the  public  and  not  the  bank  clerk, 
that  was  first  in  the  mind  of  the  American 
Bankers’  Association.  The  plan  is  being 
worked  out  perfectly,  but  indirectly,  and  in 
a way  that  they  did  not  anticipate  at  the 
time  the  idea  was  first  presented. 

The  organisation  is  conducted  under  the 
auspices  of  the  American  Bankers’  Associa- 
tion to  promote  the  education  of  bankers  in 
banking  through  the  organization  of  chap- 
ters and  alliances  with  schools  of  finance 
and  law,  and  to  fix  and  maintain  a uniform 
standard  of  banking  education  by  means 
of  official  examinations  and  the  Issuance  of 
certificates. 


Its  Rapid  Growth. 

The  Institute  and  its  objects  have  proved 
so  attractive  to  the  bank  clerks  of  the 
country*,  that  in  the  seven  complete  years 
of  its  existence,  it  has  attained  a member- 
ship as  Secretary  Allen  bo  aptly  puts  it,  “of 
nine  thousand  of  the  best  and  brainiest  young 
men  that  God  ever  made,  who  will  in  a few 
years,  furnish  the  financial  ideas  of  the 
United  States.”  This  rapid  growth  Is  con- 
clusive evidence  of  the  merit  of  the  plan. 

It  Is  not  the  policy  of  the  Institute  to 
create  and  maintain  any  independent  edu- 
cational enterprise,  but  rather  through  its 
organization  to  affiliate  with  and  receive  the 
benefit  from  established  schools  of  finance 
and  law.  Following  this  plan,  the  organ- 
ization has  been  confined,  to  the  present 
time,  chiefly  to  cities  of  considerable  size, 
where  such  schools  might  be  available,  there 
being  little  or  no  attention  paid  to  the  one 
lone  clerk  in  the  country'  bank,  unless  his 
residence  chanced  to  be  near  a city  having 
a chapter — but  this  defect  has  been  remedied, 
for  in  the  last  few  months,  a correspondence 
chapter  has  been  organized  with  Mr.  FYed 
I.  Kent,  manager  of  the  Foreign  Exchange 
Department  of  the  First  National  Bank  of 
Chicago,  as  its  president.  This  correspon- 
dence chapter  has  already  reached  a mem- 
bership of  817,  composed  principally  of 
country  bankers  and  bank  clerks.  The  cor- 
respondence chapter- has  affiliated  itself  with 
the  Scranton  Correspondence  School,  and 
courses  in  practical  banking,  commercial  law. 
and  political  economy  have  been  established 
under  the  supervision  of  a committee  from 


the  Institute.  Any  of  these  correspondence 
courses  may  be  taken  by  chapter  members 
for  a fee  thirty  per  cent,  less  than  that 
charged  others.  By  reason  of  the  serious 
thought  and  attention  given  to  the  organ- 
ization of  the  correspondence  chapter  by  the 
Institute  officials,  the  opportunity  to  gain  a 
tnorough  banking  education  has  been  put 
within  reach  of  every  man  in  the  country. 


Banking  Education. 


The  Institute  has  no  apology  to  make  for 
its  existence.  It  was  brought  into  being  by 
the  American  Bankers’  Association,  who 
realized  that  there  was  a strong  and  in- 
sistent demand  on  the  part  of  the  bank 
c»erk  for  an  opportunity  to  increase  his 
knowledge  along  banking  lines.  The  in- 
telligent banker  of  1900,  prior  to  the  organ- 
ization of  the  Institute,  looked  around  and 
was  very  greatly  surprised  to  find  no  ade- 
quate facilities  for  learning  the  banking 
business,  finding  only  one  or  two  schools  in 
the  country  where  a proper  financial  edu- 
cation might  be  obtained,  and  these  schools 
beyond  the  reach  of  the  great  majority  of 
bank  employees.  Other  intelligent  bankers 
of  1900  said  they  grew  up  In  the  school  of 
experience  and  did  not  see  why  that  wasn’t 
just  as  good  for  the  junior  man  of  to-day 
as  it  had  been  for  them,  but  it  has  not 
taken  long  for  those  intelligent  bankers  to 
see  the  advantages  to  be  gained  in  the  work- 
ing out  of  the  objects  of  tne  Institute  and 
the  results  to-day,  amply  justify  the  highest 
expectations. 

The  history  of  the  Seattle  chapter,  or- 
ganized three  years  ago  last  October,  is 
only  the  repetition  of  the  history  of  ail 
other  chapters  of  the  Institute.  During  the 
first  two  years  of  its  existence,  during 
which  time  I ha<\  the  honor  of  filling  the  ex- 
ecutive chair,  there  were  in  the  city  fifteen 
promotions  of  clerks  to  official  or  junior 
official  positions.  Out  of  this  fifteen,  thir- 
teen were  members  of  our  chapter.  Now  I 
do  not  claim  that  the  chapter  was  responsible 
for  the  advancement  of  these  men  to  posi- 
tions of  higher  responsibility  but  I do  claim 
that  it  convincingly  shows  that  the  chapter 
Is  made  up  of  men  who  are  earnestly  and 
sincerely  trying  to  better  themselves  and 
tneir  institutions  and  find  the  chapter  work 
the  best  means  of  doing  so. 

It  will  take  no  argument  on  my  part  to 
convince  you  that  the  Institute  plan  of  study 
and  w-ork  is  of  vast  importance  and  benefit 
to  every  bank  official  as  well  as  every  bank 
employee  but  more  than  this,  its  scope  and 
innuence  extends  out  into  the  world  at 
large.  The  institution  feels  the  effect  of 
it.  The  teller,  insnired  by  the  success  of 
others,  takes  up  the  study,  finds  out  the 
theories  and  reasons  for  all  the  things  he 
has  been  doing.  He  is  better  able  to  wait 
upon  the  bank’s  customers,  answering  in  a 
satisfactory  manner  any  question,  simple 
or  Intricate,  the  customer  might  ask.  Thus 
the  customer  is  benefited.  The  customer’s 
know-ledge  spreads  to  his  close  associates. 
Let  me  ask  you:  How  long  w-ill  it  take  to 
raise  the  plane  of  banking  intelligence  in  any 
community,  under  this  means  of  diffusing 
knowledge? 


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THE  BANKERS  MAGAZINE, 


Preparing  for  the  Future. 

Let  me  ask  you  again:  What  will  be 
the  ultimate  result  of  this  effort  to  properly 
educate  the  bank  employee? 

The  next  generation  of  bank  officials  will 
be  the  bank  clerks  who  are  the  institute 
members  of  to-day.  Through  this  plan  of 
education  which  has  been  made  comparative- 
ly easy  for  them  and  which  they  are  earnest- 
ly seeking,  they  will  make  on  an  average, 
better  officials  than  any  who  have  gone  be- 
fore. You  will  find  them  present  at  the 
inception  of  any  proposed  financial  legisla- 
tion. keeping  their  watchful  minds  upon  it 
until  the  law  is  passed,  thereby  insuring  to 
the  commonwealth  in  which  they  live  better 
and  more  enlightened  laws  relative  to  the 
finances  of  the  country,  and  demand  a more 
strict  enforcement  of  such  laws. 

The  banker  of  to-day  is  ordinarily  a man 
who  has  grown  up  jn  the  business,  seldom 
having  more  than  a High  School  education, 
and  often  times  not  that  much.  You  will 
find  him  a shrewd  and  careful  business  man 
and  one  to  whom  the  community  looks  with 
respect.  On  the  other  hand,  you  will  find 
him  a man  of  little  or  no  education  or 
acquirements  outside  of  hi3  own  particular 
line.  Ask  any  average  banker  to  make  an 
extemporaneous  speech  and  you  have  him 
floored.  Test  his  grammar  and  you  find  him 
wanting.  In  other  words,  his  training  has 
not  brought  to  him  a degree  of  intelligence 
compatible  with  his  calling. 

Again:  This  country  has  Just  passed 

through  a period  of  depression  which  has 
caused  the  banker  much  serious  thought. 
So  long  as  man  lives,  moves  and  has  his 
being,  there  will  undoubtedly  be  recurring 
periods  of  financial  stringency,  but  by  giv- 
ing the  banker  the  same  amount  of  training 
and  development  along  his  line  as  is  accord- 
ed other  professions,  you  will  find  no  such 
serious  situation  to  be  met.  as  compared  with 
last  fall,  for,  as  the  physician  with  the 
foresight  acquired  by  a complete  education  is 
able  to  forestall  disease,  so  may  the  banker, 
with  a minute  understanding  of  past  occur- 
ences, their  causes  and  effects,  be  able  to 
forestall,  to  a large  measure,  any  threaten- 
ing period  of  financial  depression.  All  this 
is  to  be  accomplished  through  the  course 
of  study  adopted  by  the  American  Institute 
of  Banking.  Every  man  in  the  country  or 
city  bank  should  take  this  course.  It  mat- 
ters not  what  his  salary  may  be — a propor- 
tionate part  of  it.  Invested  in  the  enlarging 
of  his  conception  of  banking  problems,  will 
prove  the  best  investment  ho  can  make. 

Helping  Young  Bankers. 

And  now  let  me  say  what  I believe  to  be 
vital  to  the  future  financial  prosperity  of 
this  country.  Keep  your  eye  on  the  young 
man  in  the  bank.  Do  not  merely  watch  what 
he  is  doing  and  how,  but  lend  a helping  hand 
to  his  efforts.  You  older  bankers  were  young 
once  and  struggling  with  the  same  problems 
and  conditions  as  he.  Think  back  a few 
years  and  find  a little  sympathy  in  your 
thought  for  him.  He  comes  to  you  with  a 
question.  Do  not  turn  him  away  with  a 
curt,  short  answer  which  tells  him  what 
to  do  but  not  why.  Explain  the  reason  of 
the  action  to  him.  That  gives  him  a founda- 
tion to  work  upon.  He  is  as  anxious,  or 
more  so.  to  acquire  proficiency  In  his  work 
as  you  are  to  have  him.  but  nine  times 
out  of  ten,  you  lend  him  no  aid.  Give  him 
the  benefit  of  your  experience,  and  he  will 
pay  you  back  an  hundred  fold  for  your 
trouble.  Again:  Discourage  the  wrong  asso- 
ciations you  find  him  making,  those  that  do 
him  no  good  in  an  educational  way,  the  same 


as  you  would  if  you  found  him  in  a gambl- 
ing game.  You  have  a great  deal  of  influence 
with  your  employees,  whether  you  realize  It 
or  not,  and  a word  of  encouragement  from 
you  when  you  find  him  in  study  or  research, 
will  bring  forth  a more  determined  effort 
on  his  part. 

Look  upon  the  young  man  employee  of 
your  Institution  in  'the  light  of  his  future, 
for  he  Is  one  who  will  shape  the  financial 
destinies  of  the  greater  northwest  in  the 
years  to  come,  when  problems  of  economy 
and  commerce  will  be  of  greater  magnitude 
than  we  in  the  earlier  days  of  inis  promis- 
ing section  can  even  dream  of. 

My  plea  is  for  the  young  man.  give  him 
a helping  hand,  so  that  when  he  comes  to 
mature  judgment  and  experience,  he  will 
be  one  of  the  Indispensible  component  forces 
which  will  Insure  the  ultimate  commercial 
supremacy  of  this  wonderful  portion  of  the 
best  country  that  God  ever  created. 


THE  PROVIDENCE -NEW  YORK 
DEBATE. 

Brief  Extracts  from  the  Speeches  on  Govern- 
ment Guarantee  of  Bank  Deposits. 

UPHOLDING  the  negative  side  of  the 
question:  “Resolved,  That  the  best 
interests  of  the  country  demand  Gov- 
ernment guarantee  of  bank  deposits,”  the 
Providence  Chapter  debaters  defeated  the 
New  York  Chapter  team  at  New  York  on 
May  16  last. 

Extracts  from  all  the  speeches  are  as 
follows: 


AFFIRMATIVE. 

Would  Do  Away  With  Runs. 

F.  G.  Crane: 

Now  we  have  seen  that  the  bank  rests 
upon  the  depositor’s  confidence  in  it.  and 
that  the  depositor  has  no  actual  guarantee 
that  he  can  get  his  money  when  he  wants 
it.  Why  not  give  him  such  a guarantee? 
A guarantee  that  would  allay  his  fears  In 
times  of  stress.  He  would  no  longer  rush 
to  the  bank  and  embarrass  it  with  a demand 
for  the  immediate  payment  of  all  of  his 
money  when  the  bank  has  only  twenty-five 
per  cent,  or  less  of  Its  deposits  on  hand. 
He  would  only  draw  what  he  needed  and  so 
would  every'  other  depositor  and  there  would 
be  no  panic.  Again,  the  man  who  holds  a 
check  on  a bank  would  have  h»s  uncertainty 
cut  in  half.  He  would  no  longer  have  to 
have  knowledge  of  the  financial  soundness 
of  both  the  drawer  and  the  drawee.  The 
soundness  of  the  drawee  is  assured  to  him 
and  he  need  only  look  out  for  the  drawer. 
There  were  hundreds  of  checks  of  perfectly 
responsible  men  hem  up  and  delayed  in  being 
cleared  last  October,  on  account  of  uncer- 
tainty as  to  the  drawee  tank.  This  assur- 
ance of  the  soundness  of  the  drawee  would 
be  immense  relief  and  by  just  so  much 
would  it  tend  to  make  checks  a more  liquid 
medium  for  transacting  the  business  of  the 
country'  which  would  clearly  be  a great  stim- 
ulus to  trade. 

The  Public  Would  Be  Benefited. 

F.  P.  Gruenberg: 

Now.  roughly  speaking,  you  will  find  that 
if  you  ask  the  opinions  of  people  on  this 
question  that  most  laymen  favor  Government 


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AMERICAN  INSTITUTE  OF  BANKING. 


77 


guarantee,  while  most  of  our  oponents  are 
bankers.  I’m  not  saying  that  all  are  the  one 
and  all  of  the  others  the  other,  by  any  means. 

I merely  make  the  general  classification 
which  I am  sure  most  of  you  have  found  to 
be  correct.  This  would  make  it  appear  that 
the  public  would  profit  by  the  Government 
guarantee  of  deposits,  while  banks  and 
bankers  would  not  benefit.  Now,  granted 
for  the  sake  of  argument,  that  such  would  be 
the  case,  we  come  back  to  our  old  question 
of  "What  are  the  banks  for?”  "Do  the  peo- 
ple exist  for  the  benefit  of  the  banks,  or  do 
the  banks  exist  for  the  benefit  of  the  peo- 
ple?” We  must  come  back  to  the  fact  that 
banks  are.  and  must  be  quasi -public  in 
character,  and  so  I say  that  if  the  banks 
were  not  benefited  by  any  proposed  legisla- 
tion, but  if  that  legislation  made  for  the  pub- 
lic’s weal,  that  legislation  is  desirable  legis- 
lation. and  every  public-spirited  citizen  will 
assent.  "Howsomever.”  we  do  not  see  that 
the  banks  are  going  to  suffer  at  all  by  such 
a plan,  unless,  perchance,  rigorous,  honest 
examinations  are  suffering.  Possibly  they 
are  for  the  kind  of  banker  whose  existence 
is  "not  to  the  best  interests  of  the  com- 
munity.” 

From  The  Bank's  Standpoint. 

H.  L.  Tompkins: 

Now.  gentlemen,  when  there  Is  a run  upon 
a bank  that  institution  has  lost  all  credit. 
What  does  it  do?  Instead  of  paying  out  as 
fast  as  possible,  the  exactly  opposite  method 
is  pursued.  All  kinds  of  schemes  are  re- 
sorted to  to  gain  time.  Sometimes  only 
three  or  four  payments  are  made  in  a day. 
Is  this  system  of  putting  off  until  to- 
morrow possible  for  the  bank  next  door  or 
across  the  street?  No!  These  have  a repu- 
tation to  keep  up.  It  therefore  usually  hap- 
pens that  upon  them  though  seemingly  un- 
affected the  run  bears  most  heavily.  Would- 
n’t a plan  which  prevented  this  state  of 
things  benefit  the  solvent  bank?  Of  course 
it  would.  Runs  are  usually  an  Incident  of 
the  acute  crises  which  just  precede  business 
depressions.  These  are  periods  of  falling 
prices.  To  realize  upon  the  assets  of  a 
bank  in  a falling  market  only  adds  to  the 
trouble.  Wouldn’t  a plan  which  prevented 
the  necessity  for  this  kind  of  thing  be  of 
benefit  to  all  solvent  banks? 


NEGATIVE. 

It  Is  Not  Demanded. 

Charles  L.  Eddy: 

Government  guarantee  is  not  demanded  by 
the  people.  Such  publications  as  the  Finan- 
cial Chronicle  and  the  Bankers  Magazine 
have  condemned  it. 

It  is  not  demanded  because  it  has  met  a 
poor  reception  at  the  hands  of  legislative 
bodies.  It  was  defeated  in  Congress,  and 
only  two  Democratic  senators  voted  for  it. 
It  was  overwhelmingly  defeated  in  Ohio: 
Kansas  has  refused  even  to  consider  the 
scheme,  as  was  at  first  contemplated,  be- 
cause of  the  experience  in  Oklahoma.  Illinois 
has  rejected  it,  within  a few  months,  pro- 
viding for  private  insurance  instead. 

Moreover,  the  best  financiers  in  this  coun- 
try oppose  this  measure.  It  has  been  dis- 
cussed before  state  bankers’  conventions,  but 
we  have  yet  to  learn  of  any  favorable  action 
laving  been  taken.  It  has  been  defeated 
at  a convention  of  the  American  Bankers* 
Association,  and  James  B.  Forgan  of  Chicago, 
Francis  B.  Sears  of  Boston  and  Frank  A. 
Vanderlip  of  your  own  city  condemn  it  in 


communications  which  we  hold  In  our 
hands.  The  demand  for  this  radical  measure 
cannot  be  discovered. 

We  would  recommend  that  the  reserves 
of  state  banks  be  patterned  after  the  pro- 
visions of  the  national  banking  act  and  the 
present  state  requirements  of  Massachusetts 
and  New  York,  that  bank  examinations  be 
made  with  greater  frequency  and  more 
rigidness,  and  that  bank  examiners,  through 
thei  heads  of  their  departments  have  the 
powrer  to  reduce  loans  in  excess  of  the  law: 
that  the  office  of  examiner  be  taken  from 
politics,  made  a life  position,  with  removal 
for  just  cause,  and  that  appointments  be 
granted  only  after  fitness  has  been  proved 
by  passing  a civil  service  examination,  and 
that  the  salary  of  examiner  be  commensurate 
with  the  duties  required,  and  further,  that 
directors  be  held  more  strictly  accountable 
for  losses  sustained  through  overloaning  or 
mismanagement.  Ex-Comptroller  Ridgeley 
has  recommended  these  changes  in  successive 
reports,  and  we  maintain  that  such  reform 
is  better  calculated  to  protect  depositors 
than  Government  Insurance  of  deposits  in 
failed  banks. 

Guaranteeing  Loans,  Too. 

W.  G.  Meader: 

For  we  must  bear  in  mind  that  the  Govern- 
ment guarantee  of  bank  deposits  means 
Government  guarantee  of  loans,  since  the 
usual  Teason  why  a bank  cannot  pay  its  de- 
positors in  full  is  that  its  loans  are  insecure. 
As  these  are  secured  by  the  Government, 
the  bank  executives  will  be  less  careful  to 
select  “gilt-edge”  loans,  and  will  be  more 
eager  to  obtain  those  which  offer  larger 
returns  with  correspondingly  less  security. 
Especially  will  this  be  true  of  the  weak 
banks.  There  is  no  danger  of  loss  to  de- 
positors, since  the  Government  has  insured 
them  against  loss.  We  see  then  that  this 
system  would  Injure  the  banking  business  by 
discouraging  sound  banking  and  by  encourag- 
ing speculation. 

A Paternalistic  Theory* 

F.  L.  Hall: 

The  principle  of  Government  guarantee  is 
founded  on  the  paternalistic  theory  of  Gov- 
ernment which  asserts  that  the  people  are 
unable  to  manage  great  private  enterprises 
for  the  public  good,  and  wmch  would  there- 
fore have  the  government  act  like  a great 
father  in  protecting  them.  Tne  doctrine  is 
held  chiefly  by  Socialists  and  is  in  practice 
in  but  few  nations,  of  which  Russia  is  easily 
the  most  typical  ca«*e.  In  America,  this 
doctrine  has  been  warmly  opposed  as  danger- 
ous, and  as  contrary  to  the  principles  on 
which  this  nation  was  established  and  is 
still  maintained. 

• • • • 

The  banks  must  necessarily  set  aside  a 
considerable  sum  in  order  to  establish  this 
guarantee  fund.  This  expense  by  any  plan 
yet  proposed  is  going  to  bo  quite  an  amount 
for  the  banks  to  pay.  But  the  banks  will  not 
cut  their  profits  and  their  dividends  to  main- 
tain thi9  fund  for  the  benefit  of  the  de- 
positors. On  the  contrary  the  banks  will 
cut  down  the  rate  of  interest  on  the  de- 
positors’ balance  and  raije  the  rate  of  dis- 
count, as  they  would  have  a perfect  right 
to  do.  Oh!  with  any  such  pretty  scheme 
as  this  the  common  people  as  usual  would 
have  to  pay  for  It.  We  see  then  that  Gov- 
ernment guarantee  would  be  detrimental  to 
the  people  In  a financial  way. 


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THE  BANKERS  MAGAZINE. 


MEASURING  BANK  CLERKS. 

HERE  is  a recent  newspaper  dispatch 
from  Pittsburg: 

A collection  of  photographs,  measurements 
and  data  similar  to  a rogues’  gallery  is  said 
to  be  planned  by  the  bankers  of  this  city  to 
keep  track  of  their  clerks. 

Within  the  last  year  Pittsburg  banks  have 
lost  $7,600,000  through  dishonest  employees. 
In  some  instances  they  have  been  convicted. 
In  many  others,  that  the  banks  might  avoid 
the  notoriety,  the  cases  have  not  been  pros- 
ecuted, and  the  shortages  were  made  good 
by  the  bankers. 

In  order  to  be  able  to  know  what  a bank 
clerk’s  record  is,  it  is  planned  to  keep  a 
central  ganery  of  all  those  employed  so  that 
the  bankers  may  tell  at  a glance  all  that  is 
known  of  the  men. 

The  Bertillon  clerk  of  the  police  depart- 
ment has  been  called  in  and  will  probably 
have  charge  of  the  establishment  of  the 
collection  along  Bertillon  lines. 

The  clerks  are  furious  at  the  idea. 

Probably,  if  the  above  account  is  correct, 
a great  deal  of  the  loss  was  due  to  dis- 
honest officials  instead  of  to  the  clerks.  It 
it  said  that  one  official  who  robbed  a bank 
of  a large  amount  was  given  a Christmas 
present  of  $5,000  “in  appreciation  of  his 
faithful  services  to  the  bank!” 


THREE  NEW  CHAPTERS. 

OFFICERS  of  the  new  Augusta,  Ga., 
Chapter  have  been  elected  as  follows: 
Joseph  P.  Bartley,  president;  J.  C. 
Pope,  vice-president;  Frank  H.  Astin,  sec- 
retary; and  W.  D.  Irvin,  treasurer. 

The  organization  committee  of  the  Bir- 
mingham, Ala.,  Chapter  consists  of:  E.  J. 
Hilty,  First  National  Bank;  Mr.  Bran- 
don, Jefferson  County  Savings  Bank;  J. 
W.  Paeskc,  Birmingham  Trust  & Savings 
Company;  Mr.  Bierd,  People’s  Savings  Bank 
& Trust  Company;  Mr.  Moore,  Traders’ 
National  Bank;  C.  Pointer,  Steiner  Bros.; 
Mr.  Daily,  American  Trust  & Savings  Bank; 
Mr.  Stewart,  Commercial  State  Bank;  and 
Mr.  Knapp,  Bank  of  Ensley. 

A chapter  is  also  being  organized  at  Nash- 
ville, Tenn. 


NEW  YORK  CHAPTER  OFFICERS 
AND  DELEGATES. 

AT  the  annual  meeting  and  dinner  of 
the  Board  of  Consuls  of  New  York 
Chapter  held  Thursday  evening,  June 
4,  1908,  the  following  gentlemen  were  unan- 
imously elected  officers  for  the  ensuing  year: 
President,  R.  P.  Kavanagh,  52  Broadway; 
vice-president,  Edw.  H.  Callanan,  National 
Bank  of  Commerce;  second  vice-president, 
R.  W.  Brett,  Chemical  National  Bank;  sec- 
retary, A.  A.  Ekirch,  Noith  Side  Savings 
Bank;  treasurer,  H.  M-  Baldwin,  Title 


Guaranty  & Trust  Co.;  librarian,  A.  L. 
Kley,  Citizens’  Central  National  Bank; 
Chief  Consul,  L.  N.  Roe,  Mutual  Alliance 
Trust  Co.,  secretary  to  Board  of  Consuls, 
C.  W.  Cary,  Metropolitan  Trust  Co. 

The  following  delegates  were  chosen  to 
represent  New  York  Chapter  at  the  Prov- 
idence Convention,  July  23,  24,  and  25: 
M.  F.  Bauer,  M.  L.  Wicks,  J.  A.  Nielson, 
E.  H.  Callanan,  M.  F.  Hudson,  R.  W. 
Brett,  C.  R.  Dunham.  J.  H.  Thompson,  R. 
P.  Kavanagh,  H.  S.  Andrews,  J.  B.  Kom- 
dorfer,  C.  F.  Minor,  L.  N.  Roe,  W.  M. 
Rosendale,  C.  W.  Cary,  T.  H.  Hunt,  Jr., 
W.  B.  Matteson,  W.  I.  Dey,  J.  Fallon,  C.  F. 
Manchon,  O.  H.  Cheney,  A.  A.  Ekirch,  L.  J. 
Grinnon,  W.  E.  Stevens,  M.  Read,  V.  A. 
Lersner,  R.  W.  Shelter,  A.  R.  Kinsey,  W. 
H.  Milliken. 


THE  EXECUTIVE  BOARD. 

Chicago  chapter  is  booming  two 

of  its  members  for  the  Executive 
Board  of  the  Associated  Chapters — 
George  A.  Jackson  and  Ralph  C.  Wilson. 
In  regard  to  these  men  Benj.  B.  Bellows, 
editor  of  “The  Bank  Man,’’  the  official  or- 
gan of  the  Chicago  Chapter,  says: 

Jackson  will  represent  the  Associated 
Chapters  and  Wilson  will  be  elected  by  the 
"Fellows,’*  which  is  the  new  section  of  the 
A.  I.  D.  created  at  the  convention  at  De- 
troit last  summer.  There  are  no  other 
members  in  the  A.  I.  B.  better  known,  more 
popular  or  more  deserving  of  honors  than 
these  two  gentlemen. 


FAVORS  CREDIT  CURRENCY. 

IN  a recent  prize  contest  conducted  by 
the  Chicago  Chapter  Duncan  G.  Bel- 
low's of  the  Zion  City,  111.,  Bank,  took 
first  prize  for  a paper  on  “Currency  Re- 
form.” One  of  his  strong  statements  is: 

The  basis  of  the  theories  of  all  politicians 
seems  to  be  that  what  we  want  is  more  cur- 
rency. As  a matter  of  fact  we  have  hundreds 
of  millions  too  much  fixed  currency  now. 
What  we  need  is  to  eliminate  the  objection- 
able elements,  and  to  supply  the  one  lack- 
ing and  most  of  all  desirable  element,  viz.: 
credit  currency. 


A BAD  MIX-UP. 

FUNNY  things  sometimes  get  into  the 
newspapers.  Here  is  one,  sent  us  by 
the  Bank  of  Visalia,  Visalia,  Cal- 
ifornia: 

Washington.  June  24.— The  Controller  of 
the  Currency  to-day  issued  certificates  auth- 
orizing the  First  National  Bank  of  Visalia 
to  commence  business,  with  a capital  of 
$200,000.  Clarence  M.  Smith  is  president,  C. 
J.  GIddings,  vice-president,  and  L.  C. 
stores  and  lumber.  A wrecking  tug  has 
been  sent  to  her.  She  is  in  no  immediate 
danger  to-night,  as  the  sea  is  calm. 


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THIS  department  is  for  the  benefit  of  those  interested  in  promoting  the  busi- 
ness of  banks,  trust  companies  and  investment  houses  by  judicious  advertis- 
ing. Correspondence  is  desired.  The  purpose  is  to  make  this  department  a clear- 
ing house  for  the  best  ideas  in  financial  publicity.  Send  inquiries,  suggestions, 
information  concerning  results  of  various  methods  and  campaigns,  and  samples  of  ad- 
vertising matter  for  comment  and  criticism,  to  T.  D.  MacGregor,  Manager,  Publicity 
Department,  Bankers  Publishing  Co.,  90  William  Street,  New  York. 


THE  INTELLECTUAL  SIDE  OF  ADVERTISING. 

By  Francis  R.  Morison,  Advertising  Manager  The  Citizens  Savings  and  Trust 

Co.  of  Cleveland,  Ohio. 


IN  treating  of  the  intellectual  side  of  ad- 
vertising, it  is  of  those  qualities  which 
tend  to  dignify  and  ennoble  it  that  I 
wish  to  speak  rather  than  of  those  attributes 
which  have  made  publicity  the  motive  power 
of  the  business  world.  Inasmuch  as  this 
brief  paper  does  not  attempt  to  set  forth 
the  origin  of  advertising,  we  can  dispense 
with  the  details  of  birthplace  and  infant 
years,  turning  rather  to  the  conditions  pre- 
vailing in  the  field  of  publicity  as  we  find 
them  to-day. 

Perhaps  it  will  be  well,  in  the  first  place, 
to  consider  the  character  of  the  leaders  in 
all  lines  of  advertising.  These  men  are  not 
illiterate,  untrained  nor  of  a low  standard 
of  intelligence,  as  the  references  to  them  of 
uninformed  persons  would  sometimes  indi- 
cate. They  are  men  who  have  distinguished 
themselves  in  university  life — men  of  intel- 
lect and  culture — men  who  have  turned  from 
the  other  professions,  feeling  that  there  is 
greater  scope  for  their  literary  powers  in 
the  advertising  field.  Many  of  these  men 
have  filled  prominent  editorial  posts  on  our 
great  metropolitan  newspapers  or  world- 
wide magazines.  Such  men  are  the  leaders 
in  advertising  to-day  and  anybody  who 
sneers  at  advertising  as  a profession  merely 
displays  his  own  colossal  ignorance. 

Modern  advertising  is  literature.  The 
moment  that  an  advertising  writer  departs 
from  the  merest  outline  of  a stereotyped 
display  advertisement,  and  elaborates  ever 
so  slightly  the  points  treated,  he  enters  the 
realm  of  literary  composition.  His  writ- 


ing may  be  good  or  bad,  yet  it  is  a part  of 
the  world  cf  letters,  and  whether  good  or 
bad,  it  finds  congenial  companionship  among 
the  orations,  the  poems,  the  essays  and  the 
histories  of  both  past  and  present. 


Advertising  As  Literature. 


Judged,  moreover,  from  the  viewpoint  of 
the  number  of  its  readers,  its  importance, 
its  forms,  its  truthfulness  or  its  attractive- 
ness, modern  advertising  vies  with  the 
greatest  literary  productions  of  the  civilized 
world. 

While  the  object  of  advertising  is  con- 
fessedly the  making  of  money;  yet  is  that 
not  the  spur  under  which  many  a novel, 
poem  or  essay  has  been  produced?  Did 
not  Johnson  write  his  immortal  Rasselas  to 
defray  his  mother’s  funeral  expenses?  The 
grocer  and  the  landlord  oft  knock  insistent- 
ly on  the  door  of  a literary  light  long  before 
the  publisher’s  check  arrives  to  relieve  the 
financial  stress. 

In  the  service  rendered  to  humanity,  ad- 
vertising falls  not  one  whit  behind  the  best 
in  literature.  Advertising  brings  comforts, 
happiness,  contentment,  satisfaction,  op- 
portunities, wealth  and  knowledge  to  mil- 
lions of  men  and  women,  the  world  over, 
who  are  thereby  freed  from  much  of  the 
slavery  imposed  by  ignorance,  lack  of  me- 
chanical helps,  labor  saving  devices  and  the 
comforts  of  life. 

If  then  this  beneficient  service  is  accom- 
plished by  means  of  the  pen,  let  us  consider 


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THE  BANKERS  MAGAZINE. 


the  literary  qualities  necessary  in  a success- 
ful writer  of  advertising,  whose  work,  in  a 
few  words,  may  be  summed  up  as  the  ability 
to  connect  words  to  ideas  or  phrases  to 
facts,  to  adorn  while  expressing  truth,  to 
inform  the  reader  and  to  persuade  him  to 
believe  as  does  the  writer.  A great  deal  of 
this  ability  may  be  obtained  by  intuition, 
but  it  is  only  after  years  of  hard  work  and 
study  that  a man  is  fitted  for  the  prepara- 
tion of  the  highest  and  best  in  advertising 
literature,  in  fact  he  must  give  himself  up 
unrestrainedly  to  this  as  a life  work. 

It  is  sometimes  said  that  the  writer  of 
advertising  literature  is  born,  not  made. 
While  to  some  extent  this  is  true,  success 
is  the  result  of  all  the  effort  and  all  the 
learning  that  a man  can  bring  to  his  task. 
He  must  be  able  not  only  to  create,  but  to 
reflect  upon  and  criticize  his  own  writing 
and  that  of  others  falling  under  his  obser- 
vation. 

Force  in  Advertising. 

Advertising,  moreover,  must  possess 
power,  force,  energy  to  a degree  that  will 
successfully  set  in  motion  the  desire  and 
will  of  the  reader.  It  must  possess  the  same 
appeal  to  the  human  heart  that  is  a common 
characteristic  of  all  great  literature — the 
force  which  adds  life  to  any  literary  pro- 
duction— making  it  effective  in  its  influence 
over  the  human  mind.  This  can  be  accom- 
plished by  no  mere  journalistic  trick  nor 
dogmatic  assertiveness.  There  must  always 
be  a reserve  and  dignity  rather  than  a 
parade,  with  a fine  recognition  of  the  per- 
sonality and  independence  of  the  reader. 

It  is  the  quality  of  the  matter  which  in- 
forms the  general  public  of  the  thing  ad- 
vertised that  assures  success,  or  results  in 
failure.  The  clearness  with  which  the  de- 
sirable qualities  of  an  article  are  set  forth 
to  the  reading  public  depends  upon  the 
writer’s  literary  ability.  The  power  of  the 


appeal  which  can  be  made  to  the  public, 
moreover,  depends  upon  the  thoroughness 
of  the  knowledge  which  the  writer  may  have 
of  humanity.  It  is  only  when  advertising 
conforms  to  the  laws  of  human  thought 
that  it  finds  its  logical  place  in  the  great 
structure  of  human  life,  as  we  see  it  to- 
day. It  makes  little  difference  how  valu- 
able a commodity  may  be  to  the  world,  if 
this  value  is  not  set  forth  clearly  and 
naturally,  the  public  will  not  understand, 
and  if  it  does  not  understand,  it  can  not 
act. 

Dignified  Advertising. 

The  exacting  requirements  of  advertising 
writing  have  spread  throughout  the  entire 
business  world.  Many  a blundering  business 
man  who  had  never  thought  much  about  his 
manner  of  speech  nor  the  way  in  which  he 
dictated  a letter,  has  during  recent  years 
systematically  studied  modes  of  expression, 
exact  meaning  of  words,  and  has  given  the 
communications  going  forth  from  his  office 
an  ever  increasing  semblance  of  literary 
form  and  the  entire  business  world  has  be- 
come permeated  with  the  literary  spirit. 

The  ennobled  and  dignified  type  which  ad- 
vertising has  assumed  during  the  last  decade 
has  fitted  it  as  an  appropriate  means  for 
enlarging  and  extending  the  business  rela- 
tions of  conservative,  financial  institutions 
and  those  banks  and  trust  companies  which 
have  adopted  judicious  methods  of  adver- 
tising have  profited  largely  thereby.  Many 
persons  who  had  distorted  ideas  concerning 
bank  methods  have  learned  from  bank  ad- 
vertising literature  the  true  attitude  of  the 
banker  toward  the  public,  and  this  has 
established  a greater  degree  of  mutual 
understanding  and  confidence  than  formerly 
existed.  The  haze  of  mystery  has  been  rap- 
idly dispelled  and  the  pure  light  of  under- 
standing has  taken  its  place. 


An  Appropriate  and  Attractive  Blotter  Ad. 


Digitized  by 


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CALENDAR  ADVERTISING  FOR  BANKS. 

By  Edwin  N.  Ferdon,  Advertising  Manager  Brown  & Bigelow,  St.  Paul,  Minn. 


I HAVE  before  me  a large  roll  calendar 
gotten  out  by  a big  and  prosperous 
eastern  bank.  To  me  individually  it  is 
absolutely  unprepossessing.  The  upper  part 
of  the  calendar  shows  a very  poor  half-tone 
illustration  of  the  exterior  of  the  bank; 
surrounding  this  is  a j umbled  mass  of  word- 
ing printed  in  several  colors;  below  is  at- 
tached a large  sized  calendar  pad,  the  only 
feature  of  any  value  at  all. 

This  calendar,  I understand,  is  sent  an- 
nually to  all  depositors  of  the  bank;  also 
to  a list  of  good  prospective  customers. 
Identically  the  same  style  of  calendar  has 
now  been  mailed  for  three  successive  sea- 
sons. Undoubtedly  the  bank  officials  believe 
this  calendar  is  doing  their  institution  some 
good  or  they  would  not  send  it  out.  Also, 
undoubtedly,  the  truth  of  the  matter  is  that 
they  don’t  know  anything  about  its  adver- 
tising value,  never  having  taken  the  trouble 
to  go  into  the  matter,  even  superficially. 

Possibly  they  have  seen  a few  specimens 
hanging  up  in  offices  and  business  houses 
about  town.  It  is  very  likely  that  the  large 
pad  would  prove  useful  in  such  places, 
and,  in  the  absence  of  a better  calendar, 
the  thing  was  given  a position  on  the  wall. 


r.  rutt*  4 cmmm 


*ae>  r mta 

~ ~ ~ ’jr  ~ / 2 

J 4 J ff  7 A ft 

AJ  //  n»  /J  /4  /5  /A 

/J  /S  /V  20  2/  22  2.1 


Copyright,  1907,  Brown  A Bigelow,  St  Pau 
Kathryn  — Allen  Gilbert. 


6 


But  what  about  the  hangers  sent  to  the 
army  of  individual  depositors  whose  ac- 
counts are  so  desired?  Such  a calendar 
must  be  wasted  on  them,  unless,  perhaps, 
it  is  turned  over  to  the  servant  or  hung  in 


Copyright,  1907,  Brown  A Bigelow,  St.  Paul. 

General  Washington  — Ferris. 


the  woodshed.  The  up-to-date  housekeeper 
will  not  find  a place  for  a hideous  creation 
like  this — not  if  she  can  get  hold  of  some- 
thing neater,  more  artistic  or  more  beauti- 
ful. Even  the  monstrous  pad  is  a detri- 
ment, being  unnecessary  and  undesirable  in 
the  home. 

Yet  the  money  put  into  that  calendar 
would  have  more  than  purchased  an  artistic 
little  creation  which  would  have  been  a 
source  of  pleasure  to  every  household,  and 
a source  of  profit  to  the  bank. 

Selection  and  Distribution. 

The  whole  trouble  is,  that  the  majority 
of  bankers  who  do  use  calendars  do  not 
give  enough  attention,  first,  to  selecting  the 
calendar;  second,  to  distributing  it.  They 
purchase  often  without  much  thought  and 
distribute  with  less.  Their  way  of  looking 
at  the  matter  is  summed  up  by  a sigh  of 
relief  when  the  last  calendar  has  been 
mailed,  and  the  observations  “Well,  that’s 
over.” 


Digitized  by 


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Google 


8« 


THE  BANKERS  MAGAZINE. 


If  this  is  the  spirit  with  which  to  tackle 
an  advertising  proposition,  why  on  earth 
advertise,  and  invite  nothing  but  the  loss 
of  your  appropriation? 

A bank’s  calendar  should  be  selected  as 
carefully  as  a painting.  It  is  intended  to 
hang  in  the  homes  of  the  very  best  and 
most  prosperous  citizens.  Those  who  are 


that  the  bank  got  out  some  such  eyesore 
as  I have  above  mentioned;  or  else  pur- 
chased a really  meritorious  calendar  but 
failed  entirely  to  make  use  of  it  in  a way 
to  produce  the  results  which  right  calendar 
advertising  can  and  will  bring  to  any  bank. 

Why  should  a good  calendar,  artistic, 
pleasing,  very  attractive,  and  rightly  dis- 


1909  JANUARY*  1909 


SUN 

MG iff 

"TWf 

TiFEt*' 

*TMV 

srttt 

SAY  jC 

1 

2 P 

3 

4 

5 

6 

7 

8 

9 | 

! I||  10  It  12  13  14  15  leflll 
I III  17  18  19  20  21  22  23  j 
| HI  II  25  26  27  28  29  30  j 

JEFFERSON  CITY.  M0. 


Coi'YRlOHT,  1907,  Brown  A Bigelow,  St  Paul. 

Highway  of  All  Nations  — Thomas  Moran. 


to  receive  it  know  how  to  appreciate  the 
artistic  and  beautiful;  what’s  more,  they 
will  not  give  a permanent  place  in  the  sit- 
ting room  or  library  to  anything  which — 
to  their  mind — does  not  meet  a certain 
standard  of  artistic  excellence.  Hence,  it 
becomes  imperative  that  the  calendar  sent 
them  shall  fill  this  requirement. 

Time  after  time  calendar  salesmen  call- 
ing on  a banker  are  told:  “Calendar  ad- 
vertising does  not  pay.  We  tried  it  a few 
seasons  and  gave  it  up.”  In  almost  every 
case,  on  sifting  the  matter,  it  transpires 


tributed,  prove  a good  advertisement  for  a 
bank? 

In  the  first  place  such  a calendar  is  in 
keeping  with  the  character  of  a bank.  It 
is  dignified,  free  from  any  undesirable, 
clieap  or  tawdry  qualities  tending  to  weaken 
the  impression  of  stability  which  is  any 
bank’s  greatest  asset.  Take  for  instance 
a subject  by  Stuart  Travis  or  Allan  Gil- 
bert— just  to  pick  two  modern  artists  uni- 
versally known.  In  the  retail  art  stores  of 
the  great  cities  photo-color  reproductions 
of  work  by  either  of  these  artists  sell  at 


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BANKING  PUBLICITY. 


88 


anywhere  from  $1.00  to  $9.50  for  the  sheet 
pictures  alone;  framed,  they  go  at  two, 
three  and  four  times  as  much.  You  will 
find  reproductions  in  plain  sepia  half-tone 
advertised  in  the  magazines  at  fifty  and 
seventy-five  cents  apiece. 

Yet,  thanks  to  the  enterprise  of  one  or 
two  of  the  big  calendar  manufacturing  con* 
cems  of  this  country,  it  is  possible  for  a 
bank  to  offer  its  customers  a calendar  with 
a superb  photo-color  reproduction  of  the 


mediately  give  the  bank  credit  for  a sub- 
ject valued  in  their  minds  at  the  retail  prices 
with  which  they  are  acquainted. 

Many  a banker  puts  three  times  as  much 
of  an  appropriation  into  card  cases,  gentle- 
men’s leather  wallets,  and  the  like,  that  do 
not  begin  to  be  as  valuable  or  desirable  to 
the  recipient  as  one  of  the  subjects  I have 
mentioned.  And  as  for  buying  a pocket- 
book  for  twenty-five  or  thirty  cents,  Heaven 
help  the  reputation  of  the  bank  offering 


Copyright,  1*K>7.  Brown  A Bigelow,  8t.  Paul. 


Protection. 


best  work  of  these  artists — and  of  a hundred 
and  one  others — at  a cost  of,  say,  anywhere 
from  fifteen  to  thirty  cents  apiece. 

Pleasing  Customers. 

Do  your  customers  consider  that  as  a 
twenty-five  cent  subject?  Decidedly  not! 
They  have  been  looking  wistfully  at  pic- 
tures no  better  (often  not  as  good)  exhibit- 
ed in  art  stores  Or  featured  in  the  magazines, 
'ihey  know  the  price  demanded  for  those 
pictures;  in  fact,  they  know  in  a general 
way  what  any  beautiful  work  of  that  nature 
would  cost  them,  and  therefore  they  im- 


such  gifts  to  its  patrons  at  Christmas  time! 

There  is  absolutely  no  waste  circulation  in 
calendar  distribution.  The  banker  knows 
just  exactly  whom  he  wants  to  receive  a 
calendar.  He  knows  where  there  is  a 
chance  for  that  calendar  to  fulfill  its  mis- 
sion. He  is  paying  to  reach  those  whom 
he  wants  to  reach,  and  not  a cent  more. 

Ask  yourself  if  it  is  not  worth  about  two 
cents  a month  to  hang  a calendar  of  some 
900  to  4-00  square  inches  in  every  home 
where  you  feel  your  bank  should  be  known. 
You  cannot  obtain  that  space  in  any  other 
way.  You  cannot  buy  it.  No  bill  posting 


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THE  BANKERS  MAGAZINE. 


ttamiltcn  Cruet  Co 


Copyright,  1907,  Brown  A Bigelow,  St.  Paul. 

Old  Stone  Mill. 


concern  could  contract  to  fill  it  for  you. 
And  yet,  right  in  the  heart  of  the  family, 
where,  if  anywhere,  is  discussed  the  how, 
when  and  where  of  the  monthly  deposit, 
the  mere  expenditure  of  some  two  cents  a 
month  will  give  the  name  of  your  bank  a 
commanding  position. 

Perhaps,  however,  in  no  way  is  calendar 
advertising  so  valuable  to  the  bank  as  in 
the  chance  it  offers  to  the  banker  to  come 
in  touch  with  the  depositor,  actual  or  pros- 
pective. The  method  it  offers  is  through 
right  distribution.  Nor,  perhaps,  is  there 
any  opportunity  passed  by  so  often  even 
by  bankers  using  good  calendars,  as  this 
very  one. 

Personal  Advertising. 

A banker  said  to  me  not  long  ago:  “I 
don’t  suppose  that  lots  of  our  patrons  even 
know  this  bank’s  capital,  surplus  or  amount 
of  deposits;  in  fact,  there  are  at  least  five 
other  banks  in  which  they  might  deposit 
with  equal  safety,  but  I believe  we  hold 
many  of  them  because  we  interest  ourselves 
in  them.  The  secret  is  personal  advertis- 
ing” 

The  distribution  of  a bank’s  calendars 
should  be  right  from  the  bank.  One  of  the 
officials  of  the  bank  should  himself  attend 
to  the  matter.  It  might  surprise  him  to 
really  know  what  a compliment  many  of  the 
depositors  would  consider  such  a presenta- 
tion of  the  calendar.  When  it  is  time  to 
distribute  the  calendars,  send  out  a form 
of  letter  or  printed  card  to  each  custo- 
mer, with  the  information  that  a beautiful 
work  of  art  is  being  held  to  their  demand 
until  a specified  date.  Ask  them  to  call 
personally  and  receive  it.  They  will  come 
— trust  to  a really  good  calendar  to  bring 


them — and  then  is  the  bank’s  chance  for 
personal  advertising.  Why,  a handshake 
then,  a personal  New  Year’s  greeting,  if 
nothing  else,  is  as  good  as  all  the  rest  of 
the  year’s  advertising  put  together. 

There  are  depositors  whom  the  cashier, 
for  instance,  may  never  have  become  ac- 
quainted with.  Right  here’s  his  chance. 
Any  depositor  is  more  loyal  to  his  bank 
when  he  knows  its  officers,  and  feels  that 
they  are  interested  in  his  account,  no  mat- 
ter how  small.  Nor  is  the  personal  ele- 
ment entering  into  this  the  only  factor  of 
importance,  for  such  distribution  doubles 
the  value  of  the  calendar  in  the  eyes  of  the 
recipient. 

I have  said  that  a very  large  calendar 
might  be  undesirable  for  distribution  to 
the  home.  The  reason  is  lack  of  harmony 
with  the  neat  surroundings,  or  lack  of 
room,  mainly  the  former,  however.  In  the 
case  of  offices  and  business  houses,  the 
case  is  quite  different.  Here  a large  cal- 
endar should  be  used  with  large  pad  and 
figures.  But  remember,  that  at  the  same 
time  art  is  as  much  appreciated  in  the 
office  as  at  the  home. 

For  instance,  the  Gilbert  head  shown 
herewith,  oV  that  of  Washington,  are 
especially  appropriate  for  the  home,  while 
a large  wall  hanger,  like  the  “Highway  of 
all  Nations'’  by  Thomas  Moran,  size  27x41, 
is  too  bulky  for  display  in  a sitting  room, 
but  is  the  ideal  “sign”  calendar  for  an 
office. 

Like  other  advertising,  calendar  advertis- 
ing can  be  indulged  in  hit  or  miss,  but 
also,  as  in  the  case  of  other  advertising,  its 
real  value  can  only  be  ascertained  by  sys- 
tematically, intelligently  and  thoroughly 
following  up  all  its  possibilities. 


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ADVERTISING  CRITICISM. 

Remarks  on  Financial  Advertising  Received  for  Comment. 


HERE  we  are — a freak  of  nature  and 
a pun,  both  on  the  cover  of  a bank 
statement  folder.  The  figures  of  the 
statement  do  show  a continuous  and  satis- 
factory growth,  but  not  a word  of  explana- 
tion is  given  concerning  this  strange  product 
of  Iowa  shown  on  the  cover.  We  confess 


A CONTINUOUS 
GROWTH 


The 

FARMERS  STATE  BANK 
Hopkinton,  Iowa 


“The  Tail  of  Two  Kitties.*'  Scat! 

we  are  like  the  little  boy  who  upon  being 
told  the  story  of  Bruce  and  the  spider 
asked:  “What  became  of  the  spider?”  We 
want  to  know  more  about  those  feline 
Siamese  twins. 


In  advertising  its  letters  of  credit  the 
Mellon  National  Bank  of  Pittsburgh  says 
that  they 


Are  issued  only  to  those  of  known  re- 
spectability. 

On  account  of  this  nice  discrimination 


they  are  not  only  a valued  introduction  to 
the  banks  to  whom  they  are  addressed,  but 
may  also  be  used  as  an  introduction  to  in- 
dividuals, business  houses,  hotels  and  trans- 
portation companies. 

It  would  be  interesting  to  know  how  the 
bank  decides  whether  or  not  an  applicant 
is  respectable,  and  what  does  the  prospective 
customer  do  while  his  claim  to  respectability 
is  being  looked  up? 


Another  Pittsburgh  institution,  the  Union 
Savings  Bank,  incorporates  something  in 
one  of  its  ads.  the  wisdom,  or  at  least  the 
good  taste,  of  which  we  question  somewhat. 
The  line  is:  “You  would  still  need  to  save  a 
little  money  in  order  to  have  a decent 
burial !” 

Imagine  a man  saying  to  himself:  “No, 
I guess  I won’t  go  to  the  theatre  to-night. 
I must  save  the  money  because  I want  a 
decent  burial.” 

Cheer  up,  Union  Savings  Bank,  it  isn’t  as 
bad  as  that. 


The  Home  Savings  Bank  of  Des  Moines, 
Iowa,  whose  eight-inch,  five-column  news- 
paper ad.  is  reproduced  herewith,  hasn’t 
asked  us  for  any  advice  but  we’re  going  to 
give  it  some  gratuitously.  It  is  about  the 
arrangement  of  the  advertisement.  If  we 
had  that  space  and  that  interesting  story 
to  tell  we  would  give  as  much  thought  to 
the  arrangement,  the  “layout,”  of  the  ad. 
as  to  the  actual  writing  of  it.  This  ad. 
is  bound  to  make  an  impression.  Its  very 
size  insures  that,  but  an  interesting  head- 
line, an  attention-compelling  design,  better 
cuts  and  a more  readable  arrangement  of 
copy  would  increase  its  effectiveness  one 
hundred  per  cent. 

Make  the  picture  of  the  house  the  largest, 
not  the  smallest,  cut  in  the  ad.  Place  it  in 
the  upper  left  hand  corner.  To  the  right 
of  it  in  large,  lower  case  letters  have  a 
headline  reading:  “YOU  CAN  OWN  A 
HOME  LIKE  THIS.”  Have  the  ad.  nar- 
rower and  deeper.  Bind  together  with  a 
heavy  design  or  rule  border.  If  you  use 
cuts  of  the  coin  bank  and  the  pass  book, 
have  them  much  smaller  and  put  them 
down  in  the  ad.  at  the  left  margin,  opposite 
the  portion  of  the  reading  matter  referring 
to  them.  Don’t  use  the  full  statement  of 
condition  in  this  ad.  Give  the  principal 


86 


THE  BANKERS  MAGAZINE. 


Deposit  Your 
Savings  With 


HOME  SAVINGS  BANK 


Sound,  Solid 
and  Substantial 


It  k a “Boiioeu 

Evfry 
laid 
Thew  an 


and  credit  iam«  to  your 
account  January  l»t 
and  July  laL 

YOU  HAVE  THE 
BANK.  WE  HAVE 
THE  KEY, 


Builder"  and  a “Help  to  Happlnoaa.1 

fortune  had  iU  foundation 
in  unall  eavinga. 
t for  jeverybody,  old  and  young 


, Home  Savimca  ftvtk 

H *»««**•** 

wW'm. 


With  seventeen  years  ol  successful  and 
progressive  banking 

UNDER  STATE  SUPERVISION. 

CORNER  EAST  SIXTH  AND  LOCUST  STREETS. 


The  Dollar*  Entered 
on  Your  Depoeit 
Book  Will  Earn 
4 Per  Cent  Interest 
To  Brighten  Future 
Yearn.  Begin  Saving 
At  Once  and  Have 
a Home  of  Your  Own. 


Statoftont  of  IK*  Condition  of  Iho  HOME  SAVINGS  BANK 

JSSSrr  srusa  s ss.rr asstiabs  — - 

•r  poihand  MtMitf  »m<  *r  IBs  Baak  fan 

^3^*±bT  " ' 

■W‘5S 


This  Ad.  Needs  a Shaking  Up. 


figures,  but  use  most  of  your  space  in  de- 
veloping the  claim  you  make  in  the  head 
of  the  advertisement.  At  the  bottom  of 
your  ad.  run  the  name  and  address  of  your 
institution  in  big  type  to  balance  the  head. 


of  bank  advertisement.  Mr.  Kniffin  has 
used  good  judgment  in  the  subject  matter 
and  typographical  arrangement  of  his  ad- 
vertisements. They  are  really  educational 
and  it  is  not  surprising  to  learn  that  they 
proved  result ful. 

TMg,  V 

/mt  r 


Mr.  W.  H.  Kniffin,  Jr.,  cashier  of  the 
Home  Savings  Bank,  Brooklyn,  New  York 
city,  writes  about  the  newspaper  advertise- 
ments of  his  hank,  four  of  which  are  shown 
herewith^  as  follows: 

I enclose  a few  of  our  recent  advertise- 
ments for  your  inspection  and  criticism. 
My  own  opinion  is  that  some  are  too 
lengthy  and  too  much  has  been  said,  but 
the  weekly  feature  makes  it  difficult  to  do 
effective  work.  We  have  a peculiar  class  of 
people  In  this  end,  who  want  to  know  these 
things  and  we  have  tried  to  make  the  mat- 
ter educational,  at  the  expense  of  brevity. 
“Does  you  money  burn?”  strikes  me  as 
good  ns  any;  not  crowded  and  to  the  point. 

How  about  the  make-up  and  the  type  and 
the  general  effect?  There  Is  nothing  of  this 
sort  in  the  paper  and  it  is  quite  distinctive. 
Would  the  same  space,  one-half  the  length, 
he  more  effective? 

I shall  be  glad  for  any  knocks  you  may 
see  fit  to  make. 

These  ads.  are  so  good  that  no  knocks 
are  in  order,  not  even  a gentle  one. 

If  you  can  afford  the  space  and  use  it 
to  the  best  advantage  by  putting  good  copy 
into  it  you  don’t  need  to  worry  about  say- 
ing too  much  in  a savings  advertisement. 
That  is,  as  a general  rule  a savings  ad.  can 
stand  greater  length  than  any  other  kind 


IDEAS  AND  SUGGESTIONS. 

THE  Iowa  Trust  and  Savings  Bank  of 
Des  Moines,  Iowa,'  recently  conducted 
a guessing  contest  open  to  its  de- 
positors. A glass  fish  globe  full  of  pennies 
was  displayed  in  the  window  and  guesses 
were  made  as  to  the  number  of  coins  the 
dish  contained. 


The  Union  Trust  Company  of  Springfield, 
Mass.,  makes  this  offer  in  its  newspaper 
advertising: 

On  the  second  floor  of  our  new  building 
are  six  large  rooms  which  we  offer  free — 
for  use  of  individuals,  corporations  and  so- 
cieties desiring  a central  meeting-place  for 
business  conferences. 

It  is  not  necessary  that  you  carry  an  ac- 
count with  this  company  to  enjoy  these 
accommodations.  We  want  you  to  make  the 
Union  Trust  Company  your  meeting  place. 
Telephone  for  reservations. 


Every  man  or  woman  who  writes  hank 
advertisements  should  have  a note  book 


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handy  and  jot  down  in  it  ideas,  observa- 
tions and  suggestions  as  they  come.  Study 
every  advertisement  you  see  no  mutter  where 
it  is  or  what  it  is.  There  is  something  in 
it  for  you  if  you  are  alert  and  resourceful. 


The  Publicity  Department  of  the  Bank- 
ers Publishing  Co.,  in  its  preparation  work 
for  some  banking  by  mail  institutions  has 
secured  data  from  the  Post  Office  Depart- 
ment concerning  the  exact  methods  taken  to 
make  it  safe  to  transmit  money  through  the 
mails.  This  makes  good  stuff  to  use  in 
advertisements  and  booklets.  We  pass  the 
idea  on  to  others  in  this  field.  Write  to 
the  Third  Assistant  Postmaster  General  for 
information  along  this  line  and  you  will 
get  a free  copy  of  a booklet  descriptive  of 
the  U.  S.  Postal  Service.  Other  data  can 
be  bought  from  the  Public  Printer  at  Wash- 
ington, D.  C. 


It  is  a good  idea  to  make  every  effort 
to  keep  your  mailing  list  up-to-date.  The 


Union  Trust  Company  of  Pittsburgh  sends 
out  a card  with  this  request: 

To  Our  Customers: — 

We  would  appreciate  your  kind  co- 
operation in  assisting  us  in  our  efforts  to 
keep  our  mailing  list  as  correct  as  possible. 

This  card  is  sent  to  enable  you  to  advise 
us  if  the  envelope  in  which  fet  is  enclosed 
does  not  bear  your  correct  address. 

Please  use  the  space  below  for  that  pur- 
pose. 

The  Union  Trust  Company  of  Pittsburgh. 


Letter  enclosures  are  good  advertising, 
whether  they  are  just  printed  slips  contain- 
ing advertising  matter  of  your  institution 
or  some  little  advertising  novelty  of  interest 
and  value.  In  speaking  of  this  matter  the 
“Novelty  News”  says: 

Why  not  get  the  full  value  of  your  post- 
age? Do  you  realize  that  in  sending  out 
the  average  commercial  message  you  are 
pacing  one  cent  ordinarily  for  service  that 
you  do  not  receive?  It  is  true,  so  far  as 
weight  is  concerned.  Two  average  letters 
could  be  put  in  the  same  envelope  and  sent 
for  a two-cent  stamp.  The  average  com- 
mercial letter  is  not  even  half  as  heavy  as 
the  government  will  permit  to  go  under 
2-eent  postage.  Therefore,  you  are  not 


Educational  Savings  Talk. 


Digitized  by  boogie 


88 


THE  BANKERS  MAGAZINE, 


No  wonder  he  laughs 

R\.ry  io«n  with  a fat  bank  kccmlnl 
can  afford  to  touch. 

Alao  Uk»  a "aniU«“  «nc«  In  a wrhlta. 
Put  yvur  moiwy  |n.*h*  bank.  now. 
arhrra  it  will  b«  /Itawlrf  Intrrrat 
'hat  you  ran  Etttrr  on. 

We  will  tv'  clad-  tx*\ r your  ac- 
count, nr.d  talk  to*  C„u  about  'our 
method  of  puylncjrwi  InU-rcst. 

The  Valley  Bank 

-O^-aurjENlX. 


DIOOCNCS  |N  HI*  TUB. 

•u  anally  aatuflad  and  bad  few  naada 
that  Nature  couldn't  fumlah.  but  tha 

1.  modern  man  muat  hav»  proper  food 
| end  i lot  bine  and  a horna  for  hlmaalf 
J t oB|y  U> I and  family,  aad  tha  beat  way  to  obtain 

. «,t»»*nl*,K'  ®*M  H*W  «>*  “•*«  “rta«  Th#  fm4 

u a \ 0<1  pro****'0  NO  l to  wealth  and  prosperity  Ilea  tka 

rSSss^riSsra' 


p aartoca  banka.  Try 


*»••  ^ oot  only  *■*] 


THE  CITIZENS  NATIONAL  BANT/; 

\ MOUOMTON  I r, 


DRAWING  A LARGE 

EnabkAa  ■ •"*"  *®  !**•  ,b  luify- 

can  aavar  tell  what  a day 
torth.  Accidents.  dt»ea>«  er 
nidtlona  may  come,  and  th« 
ived  wfll  be  his  friend 


PiAfcdena  Sivingi  & Trust  Co 


ERNEST  M.  MAT.  .. 
JOHN  M DONALD 
S”“  “ VEDDER 


rrealdetit  , 

Vlce-Preeldent  I 

r>  THOMAS'"'  '.'.'.'.'.Ami.  Treaturer  | 
Safety  Oapaait  Bo...  7 ar  Rent. 

*240  Par  Vaar  and  Up. 


Distracting  Illustrations. 


getting:  all  you  pay  for  when  you  send  out 
a letter  which  Is  only  half  weight.  The 
service  may  be  worth  two  cents,  all  right, 
to  send  even  the  light-weight  letter,  but 
why  not  get  the  full  value  of  the  postage 
you  are  paying  for,  by  sending  a “silent 
salesman”  Inside  that  letter,  which  will  not 
cost  you  anything  to  mall. 

Utilize  your  outgoing  mails  to  carry  ad- 
ditional appeals  for  Increased  friendly  re- 
lations and  enlarged  patronage  when  you 
can  do  It  without  increasing  your  annual 
postage  appropriation  one  penny.  If  you 
do  not  do  so,  you  overlook  a splendid  ad- 
vertising opportunity,  that’s  all. 


W.  Harrison  Upson  writing  in  “Judicious 
Advertising”  on  the  subject  of  booklet 
covers  says: 

The  very  first  thing  about  a booklet  to 
greet  the  eye  of  the  observer  Is  the  cover. 
If  It  be  appropriately  chosen  and  effectively 
treated,  it  will  make  a lasting  impression 
upon  the  recipient. 

That  is  the  psychology  of  the  cover. 

Besides  this,  the  cover  should  be  service- 
able. It  should  be  selected  with  a view  to 
its  ultimate  use.  An  appropriate  cover 
which  is  attractive  enough  to  impress  and 
strong  enough  to  withstand  the  usage  of 
time  is  certain  to  prove  profitable. 

That  is  the  economy  of  the  cover. 


IT  IS  TO  LAUGH. 

Some  More  Funny  “ Stock"  Cut  Bank  Ads. 

THE  Prohibitionists  are  getting  quite 
numerous  in  the  South.  We  wonder 
how  they  will  take  to  the  sentiment 
expressed  in  that  Phoenix,  Ariz.,  bank  ad. 
to  the  effect  that  “every  man  with  a fat 
bank  account  can  afford  to  take  a ‘smile* 
once  in  a while.** 

What  a cinch  it  is  to  draw  a $10,000 
salary ! But  we  think  it  is  a vulgar  display 
of  wealth  to  draw  it  in  such  a public  way 
and  is  it  right  to  excite  such  envy  as  is 
depicted  in  the  countenance  of  the  Irish- 
American  fanner  in  the  dress  suit? 

And  there’s  our  old  friend  Diogenes  1 
Evidently  Diog.  has  found  his  honest  man 
among  the  advertisers  in  his  newspaper, 
because  he  has  allowed  his  lantern  to  go 
out  and  is  contentedly  smoking  his  pipe. 
There  are  many  anachronisms  in  this  ad- 
vertisement. In  fact,  the  whole  ad.  is  an 
anachronism.  We  could  excuse  a Hough- 
ton, Mich.,  washtub  as  a setting  for  the 
representation  of  an  ancient  Grecian  legend 


Digitized  by 


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BANKING  PUBLICITY. 


89 


from  a purely  humorous  standpoint,  but 
there  are  more  dignified  and  more  effective 
ways  to  advertise  a national  bank. 

One  of  the  guides  at  the  Philadelphia 
Mint  is  accustomed  to  say  at  a certain  stage 
of  his  tour:  “We  have  three  million  dollars 
in  gold  down  in  our  basement  and  it  gives 
us  quite  a comfortable  feeling.”  We  don’t 
see  how  any  bank  or  its  depositors  can  have 
a “comfortable  feeling”  with  its  cash  re- 
serve strewn  around  nonchalantly  on  its 
front  lawn  and  piled  up  behind  the  bank 
building. 


As  “Hashimura  Togo”  says  in  “Colliers 
Weekly,”  we  “ask  to  inquire”  what  this 
silly  picture  has  to  do  with  a checking 
account. 

By  the  way,  from  the  last  line  in  this  ad. 
one  would  think  that  the  bank  was  in 
Missouri,  but  it  is  in  Colorado. 

And  there’s  the  Golden  Calf,  too.  Another 
anachronism — the  dollar  mark  on  the  baton 
of  the  leader  of  the  orchestra  of  the 
Children  of  Israel  surrounding  the  golden 
image. 

We’re  not  sure  that  such  advertisements 


/fowJ/Ionej/ 


W«  Add  3 Per  Cent 
to  Every  Hundred 
You  5«v«. 

% HnA  t .<0 


Cl  Sauj/uys' 

Account i 


is  pour  irccatm. 

/Tl  A fcfoour.i  wU) 

t*  rou/  itimtW 
>>  ft *4  will  calr*  'hs  sr* 
fV  wM'fc  ordlnafli*  as 

paw nd  OaT*  4o41af 

/#  *)ll  HMta  an  acatruM  Tbm 
Tl  aiv  wit  Mrs.  la  *r,r 

- aroaunt  a*i  a*.  ©ftao  y 




let  fh  is  ha  > y 

work /brjtou^> 


You  expect  to  be 
we»ithy  tomcdiy. 
lon'c  yout 
bo  you  know  why 
or  how  or  when? 

A iMiadt  nil  not 
oui  pom  c^I.rt  li  •%.. 

SAVINt.  >ur1 

— »h»r,  you  r„ 

trtd  I pci  cent  HucrrM. 

Commerce  Trust  Co. 

023  WALNUT  STREET. 
Kan»*j  City.  Mo. 


More  to  the  Point. 


Digitized  by  LaOOQle 


90 


THE  BANKERS  MAGAZINE. 


as  those  reproduced  herewith  are  entirely 
useless.  They  do  not  appeal  to  us  as  being 
the  most  effective  possible,  but  we  may  be 
mistaken.  We  hope  the  spirit  will  move 
some  of  the  users  of  these  ads.  to  testify  as 
to  results  and  we  would  like  opinions  from 
other  readers  concerning  this  kind  of  ad- 
vertising. 

NW\  V 

r 

A NEW  EMBLEM. 

THE  accompanying  cut  shows  a new 
emblem  designed  and  executed  by  the 
Publicity  Department  of  the  Bankers 
Publishing  Co.  for  the  Hampden  Trust  Co. 
of  Springfield,  Mass.  The  portrait  used  i9 
that  of  John  Hampden  the  sturdy  old  par- 
liamentarian of  the  seventeenth  century  in 
England,  after  whom  Hampden  County  and, 
indirectly,  the  Hampden  Trust  Co.,  were 
named. 

The  value  of  an  emblem  to  any  financial 
institution  lies  in  this — it  provides  some- 
thing concrete  around  which  the  popular 
conception  of  the  institution  can  be  built. 

An  emblem  gives  continuity  and  unity  to 
advertising.  It  helps  create  good  will  for 
the  business.  If  it  is  a good  one,  it  em- 
phasizes, either  directly  or  by  subtle  in- 
ference, some  valuable  feature  of  the  in- 
stitution or  of  the  service  it  renders.  For 


example,  in  this  Hampden  emblem  the  por- 
trait of  honest  John  Hampden  “connotes” 
that  the  Hampden  Trust  Company  is  like- 
wise of  strong  character  and  a faithful 
guardian  of  the  people’s  interests.  The 
Rock  of  Gibraltar,  used  as  a trade  mark 


by  the  Prudential  Insurance  Co.,  connotes 
strength,  of  course;  the  dog  emblems  used 
by  some  institutions  stand  for  fidelity,  and 
so  on. 

Not  the  least  advantage  of  using  a good 
emblem  in  advertising  is  that  the  design 
serves  as  an  eye-catcher,  drawing  attention 
to  an  announcement  that  otherwise  might 
escape  the  notice  of  many  readers. 


HOW  BANKS  ARE  ADVERTISING. 

Note  and  Comment  on  Current  Financial  Publicity. 


PERSONALITY  of  the  right  kind  is  a 
good  asset  for  any  bank.  Many 
progressive  institutions  are  featuring 
this  strongly  in  their  advertising.  This  is 


herewith  a blotter  advertisement  of  the 
Bank  of  Dakota  County  of  Jackson,  Neb. 
It  bears  the  confidence-inspiring  portrait  of 
its  cashier,  Mr.  Ed.  T.  Kearney.  The  bank 


WHEN  A MAN’S  SINGLE 


Tt.aakl  I.  c.nt.rtd  *■  .««  ablact.  Mm*. 
Ihlag  ha*  la  "aaav*.” 
la  lb.  .prtar  ai  IIM.  lb.  nrttar 

"Tit  Siak  ALT  ATS  utaU  yro  3J3H7." 

Slai  iWn.  nan  am  b«.  bn  .mnal  u mb  M 
>l|ia.la.i,w44a«ai.MHI  liinwlnii rWtr  - 

b»«  •»  ii.  U.d.  ...  4 Inul  i.  in  nm  ml«>  ...  «t 
M«iJ»  I*.  •*  uH  I.  Mmalnlaa  vanib  Kn.i 

nwi.  It  bn  tVtkTtHIKn  mW.IlM  *IONT  lb rr 
mm  art tr:  Ii  n K«ni  taenia,  tariow.  Mb  iba 

all'  .tvl.nl.  Sktt. 

Dan  it  nafU  VOU^  ka.m.. 

1.0.  T.  KHABNEY.  Cashier. 
"Th*  B»M.  Ih*l  ALWAYS  lr«l,  you  RIGHT.’1 

BANK  OF  DAKOTA  COUNTY. 

JACKSON.  NEBRASKA 


This  Has  a Good  Ring  to  It. 


especially  true  in  the  West  where  the  blight 
of  overmuch  conservatism  has  not  yet  af- 
fected bankers  in  their  efforts  to  get  more 
business  by  advertising.  We  reproduce 


has  adopted  a motto:  “The  Bank  that  AD- 
WAYS  treats  you  RIGHT.”  Mr.  Kearney 
looks  like  a man  who  would  give  his  cus- 
tomers a square  deal  and  his  ad.  makes  me 


Digitized  by 


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BANKING  PUBLICITY, 


91 


want  to  shake  hands  with  him.  Here's  one 
of  his  form  letters: 

BE  A BOOSTER. 

To  our  friends: — 

Like  Oliver  Twist  of  old.  we  axe  hungry 
for  more — business,  more  depositors — more 
borrowers.  If  you  are  our  customer,  you 
know  the  way  of  a GOOD  bank.  Just  tell 
the  new  man  and  the  friend  who  does  NOT 
know.  That’s  all  we  ask — one  chance  and 
we’ll  do  the  rest.  Once  a customer — always 
a customer  here.  You  just  simply  CAN’T 
get  away  from  the  safety,  convenience, 
promptness,  accuracy  and  “up-to-dateness” 
here, — Kearney  system  and  methods.  This 
is  the  ONE  place  where  you  are  treated 
RIGHT,  no  matter  what  your  race,  age, 
wealth,  color  or  previous  condition  of  ser- 
vitude. The  manager  was  born  and  raised 


the  First  National  Bank,  of  Pittsburgh,  and 
one  of  the  Union  Trust  Co.,  Chicago: 

THE  WORD*  MONEY 

Is  derived  from  “moneta”  since 
Roman  coins  were  first  regularly 
made  in  the  temple  of  Juno  Moneta. 

Deposit  your  Money  in  the  First 
National  Bank  of  Pittsburgh  and 
enjoy  the  advantages  of  a checking 
account.  In  the  Savings  Depart- 
ment interest  is  paid  four  times  a 
year  and  no  notice  is  required  to 
withdraw  money. 

FIRST  NATIONAL  BANK. 

Fifth  and  Wood,  Pittsburgh. 

Oldest  National  Bank  in  Western 
Pennsylvania. 


..  THREE  BANK  BILLS 

kILLWARNOCK  BILL  DICKENS  BILLRIET2 

M««T  MS  r*CI  Tfc  PACK  AT  THE  OOLLAR  IAVI NOS  BANK.  ■CLCAINS.  OHM 


An  Asset  Currency. 


that  way  and  so  must  his  business  be  run 
— RIGHT.  For  more  than  twenty-two  yea's 
he  has  given  all  his  mind  and  heart  and 
labor,  to  make  this  good  bank  (founded  by 
him),  bigger,  better  and  above  all.  SAFER 
for  YOU.  The  record  runs  clear — less  than 
$50.00  total  losses,  more  depositors,  and  not 
a single  dissatisfied  customer  It  knows  of. 
($100.00  hung  up  ready  for  the  person 
wronged  by  the  bank.)  Now.  honestly, 
don’t  a GOOD  bank  like  this,  HUNGRY  for 
more  business,  eager  and  ready  to  care  for 
it  RIGHT,  and  glad  to  see  your  face  every 
time  you  set  foot  within  its  doors,  really 
deserve,  not  alone  YOUR  business,  but  ia 
little  friendly  boosting  among  your  friends? 
That’s  what  we  need  and  desire — more 
BOOSTING — more  business.  Tlmn.  YOU 
please  push  the  BOOST  button  and  wfe  will 
do  the  rest. 

Send  us  a new  customer  this  month, 
PLEASE. 

Gratefully  yours. 

"The  Bank  that  ALWAYS  treats  you 


RIGHT.” 

(Kearney’s  Bank.) 


Jackson,  Nebraska. 


The  “Three  Bank  Bills”  of  Bellaire,  Ohio, 
look  as  if  they  would  be  pleasant  to  meet 
“face  to  face.”  The  cut  is  a reproduction 
of  a post  card  they  are  sending  out,  we 
have  no  doubt  with  good  results. 


As  illustrating  the  possibilities  in  making 
bank  advertising  interesting  we  reproduce 
the  copy  of  two  of  the  advertisements  of 


GOLD 

Can  be  beaten  1200  times  thinner 
than  printing  paper;  one  ounce  will 
cover  14€  square  feet.  But  you  can 
make  It  go  the  farthest  by  deposit- 
ing it  in  a checking  account  at  the 
First  National  Bank  and  keeping  an 
exact  record  of  your  expenditures. 

In  our  Savings  Department  interest 
is  paid  four  times  a year  and  no 
notice  is  required  to  withdraw  money. 

FIRST  NATIONAL  BANK. 

Fifth  and  Wood,  Pittsburgh. 

Oldest  National  Bank  in  Western 
Pennsylvania. 


Sermons  on  Banking:  Published  every 
Thursday — No  6. 

WE  DON’T  BELIEVE  IN  PESSIMISTS 

Or  calamity  howlers.  But  we  are 
rot  pessimists  when  we  say  that  no 
man  is  safe  unless  he  has  a little 
money  laid  away  for  the  rainy  day 
that  may  come  at  any  time.  You 
know  that  yourself.  It  doesn’t  mat- 
ter how  large  a salary  he  is  now 
getting  either.  The  point  is  to  get 
a start.  Our  savings  system  is  sim- 
ple and  makes  it  easy  to  start  and 
gradually  continue.  Mr.  Ehlert  Is 
here  to  explain  it. 

Ask  Mr.  Ehlert  for  Souvenir  "B.” 


UNION  TRUST  CO.,  CHICAGO 
Tribune  Building. 

Capital  $1,000,000.  Surplus  $1,000,000. 
Deposits  $11,000,000. 

Surplus  All  Earned. 
Established  A.  D.  1869. 


Digitized  by 


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92 


THE  BANKERS  MAGAZINE. 


“The  Working  Force”  is  the  title  of  a 
booklet  in  which  the  Citizens  Savings  and 
Trust  Co.,  of  Cleveland,  O.,  tells,  by  pictures, 
how  it  handles  its  large  volume  of  business. 


The  Flatbush  Trust  Co.,  of  New  York, 
sent  out  a post  card  with  a brown  tint  cut 
of  its  building  on  it  and  underneath  it  an 
invitation  to  deposit  valuables  in  its  safe 
deposit  and  storage  vaults  for  safe  keep- 
ing during  the  summer. 


The  Union  Trust  Co.  of  Chicago,  which 
has  adopted  the  motto,  “A  Bank  for  all 
the  People,”  uses  excellent  taste  in  its 
printed  matter.  Its  latest  statement  folder 
is  one  of  the  neatest  we  have  seen,  con- 
taining concisely  prepared  and  well  dis- 
played talking  points  of  the  institution’s 
service.  Its  deposits  have  almost  tripled  in 
eight  years  and  are  now  more  than  $12,- 
000,000. 


Ito08  JUNE  19081 


—Savings  Deposits 

received  during  the 
first  five  business  days 
of  June  will  earn  3% 
per  annum  from  June  1 


First  Trust  and 
Savings  Bank 

First  National  Bank  Building 


Strong. 


The  ads  of  the  First  Trust  and  Savings 
Bank  of  Chicago  and  the  American  Trust 
and  Savings  Company  of  Springfield,  Ohio, 


Til  AIM  TRUST  & SAVWCS  COMPANY 


Lest  We  Forget. 


illustrate  good  ways  to  work  in  the  calen- 
dar reminder  idea  which  seems  to  be  a par- 
ticularly appropriate  one  for  advertising 
the  feature  brought  out  in  these  ads. 


“Funds  for  Travelers”  is  the  title  of  an 
especially  good  booklet  on  letters  of  credit, 
etc.,  gotten  out  by  the  National  Tradesmens 
Bank  of  New  Haven,  Conn.  It  gives  quite 
a full  exposition  of  the  subject  and  its 
value  is  enhanced  by  four  clear  illustrations. 
The  features  of  the  booklet  include  the  fol- 
lowing: 

Letters  of  credit:  Advantages,  advice. 

Identification,  letter  of  indication,  loss, 
method  of  payment,  specimen  letter  of 
credit,  terms,  various  letters  of  credit. 

Travelers’  checks:  Specimen  travelers’ 

check. 

Foreign  currency:  Table  of  foreign  money. 

Notes  of  general  interest:  Additional  let- 

ters of  credit  and  travelers’  checks,  bangage 
and  valuables,  customs  duties,  extension, 
mail  and  telegrams,  principal  correspond- 
ents. railway  travel  in  Europe,  time  differ- 
ence and  distances. 


Using  very  attractive  stationery,  the  Old 
National  Bank  of  Spokane,  Wash.,  recent- 
ly sent  out  this  letter  to  500  of  Spokane’s 
representative  and  influential  business  men: 

To  Our  Patrons  and  Friends: 

I take  pleasure  In  handing  you  enclosed 
a condensed  statement  of  this  bank’s  con- 
dition, as  reported  to  the  Comptroller  of  the 


Digitized  by 


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BANKING  PUBLICITY, 


93 


Currency,  under  date  of  May  14,  1908,  and 
ask  you  to  give  it  your  careful  perusal. 

Your  attention  is  invited  in  particular  to 
our  Arong  reserve  account,  it  being  43  per 
cent,  of  deposits,  or  $1,182,823.04  above  legal 
requirements. 

It  is  also  worthy  of  special  notice  that 
our  deposits,  now  amounting  to  $6,464,918.17, 
show  an  increase  over  our  February  report 
of  over  $700,000. 

This  is  taken  by  us  as  an  expression  of 
public  confidence  in  this  institution’s 
strength — of  the  help  it  has  been  able  to 
extend  to  legitimate  local  business  enter- 
prises. and  of  Its  fidelity  to  the  interests  of 
its  customers. 

I take  this  opportunity  of  thanking  you 
personally  for  the  good  will  you  have  borne 
toward  our  bank,  and  hoping  to  continue  to 
merit  the  same  in  the  future,  I remain 
Respectfully  yours, 

D.  W.  TW OH Y,  President. 

W.  J.  Kommers,  assistant  cashier,  has 
charge  of  the  publicity  work  of  this  institu- 
tion. 


statement  and  the  announcement  of  the  elec- 
tion of  R.  T.  Forbes  as  president,  succeed- 
ing William  A.  Tilden,  who  has  been  elected 
president. of  the  Fort  Dearborn  National 
Bank  of  Chicago.  The  leaflet  opened  at  the 
top  and  contained  pages  of  gradually  in- 
creasing size  which  carried  index  lines  at  the 
bottom  indicating  at  a glance  the  contents 
of  the  leaflet. 


The  May  14  call  of  the  Comptroller 
brought  out  a good  grist  of  statement 
folders.  The  Union  Bank  and  Trust  Com- 
pany of  Houston,  Tex.,  carries  on  its  state- 
ment this  motto:  “In  the  interest  of  man- 
kind especially,  Houston  materially,  Texas 
generally.”  Other  noteworthy  statements 
were  those  issued  by  the  Live  Stock  Ex- 


Nmfatgkmii 

Naftmtallattk 

■QUOTABLE  BUILDING,  BOSTON 
•oa.  mu  axo  vivommm  am 

Mm  futgUmh 
Natumallattk 

■QUITABLB  BUILDING,  BOSTON 
mb.  milk  abb  BBTOBOtta  era. 

Hu  merited  -the  confidence  of 
1U  patron  a for  over  »0  year*. 

An  especially  eafe  and  dealra- 
ble  depoeltory  for  Inactive,  truat 
and  reserve  accounta.  on  which 
Intareat  will  be  paid. 

aaS  Svplas,  *1,900,000 

NmfEttglanh 

NatumalSank 

■QUITABLB  BUILDING,  BOSTON 
MB.  MILK  mm  DBTOBSHIBB  m.  1 

fa  lutglatth 
Naftmtallattk 

■QUITABLB  BUILDING,  BOSTON 

MM.  MILK  AMD  PBTOMBIBB  ML 

Ab  Independent  banklfc#  In. 
■tltutloQ  el  undoubted'  flnnnelnl 
atrdn*th  end  with  conservative 

nufeenrat 

Dtrectora 

Partanau 

H**T*rt  Sawyer  Boland  W.  Teppan 
W Joo~  Edwin  8.  Webater 
rranclaH.  Appleton  8.  W.  Holmee 

CtplM  mi  Ssrptaa,  9 1,000,000 

CapM  a mi  tarpto,  91,900,000 

Multum  in  Parvo. 


The  little  ads.  of  the  New  England 
National  Bank  of  Boston  appear  two  or 
three  times  a week  in  the  “Herald”  of  that 
city,  the  space  being  30  lines,  single  col- 
umn. The  ads.  go  in  the  same  spot  on  the 
editorial  page  every  time,  thus  being  re- 
garded as  much  a regular  feature  of  the 
paper  as  the  weather  report  as  far  as  loca- 
tion is  concerned.  That’s  how  a small  ad. 
is  most  effective.  You  can  lose  a small 
man  in  a crowd  but  not  if  you  know  just 
where  to  look  for  him.  Verbum  tap. 


A novel  and  attractive  folder  device  was 
issued  by  the  Drovers  Deposit  National 
Bank  of  Chicago  to  combine  its  May  14 


change  National  Bank,  the  Commercial 
National  Bank  and  the  Continental  National 
Bank  of  Chicago;  the  First  National  Bank 
of  Milwaukee,  Wis.,  and  the  First  National 
Bank  of  Northfork,  W.  Ya. 


The  Salt  Lake  Security  & Trust  Com- 
pany of  Salt  Lake  City  advertises  that  it 
has  a “title  plant”  of  its  own.  It  says: 

As  a part  of  its  equipment,  the  Salt  Lake 
Security  & Trust  Company  has  compiled  its 
own  TITLE  PLANT  which  is  more  com- 
plete than  any  in  the  county  and  from  which 
it  is  easier  to  trace  a title  accurately  than 
from  the  county  records.  Our  records  are 
kept  up-to-date  by  carefully  entering  all 
transfers  of  property  and  court  proceedings. 


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THE  BANKERS  MAGAZINE. 


So  complete  are  our  records  that,  If  the 
county  records  were  destroyed  by  Are  or 
otherwise,  they  could  be  replaced  by  copying 
from  our  records.  The  Title  Plant  was  made 
in  the  year  1889  at  an  expense  of  $80,000.00 
and  it  has  cost  us  $1,000.00  per  'annum  to 
keep  it  corrected  up  to  date. 

Our  abstracts  are  recognized  as  being  the 
most  authentic  and  reliable  Issued  in  this 
county,  and  our  rates  for  service  are  fifty 
per  cent,  higher  than  the  raAes  charged  by 
the  county  recorder.  Our  system  of  check- 
ing every  item  in  a title  is  so  complete,  that 
a mistake  is  practically  impossible. 

We  are,  therefore,  in  a position  to  de- 
termine with  the  utmost  certainty  all  of  the 
facts  concerning  any  piece  of  property  upon 
which  we  are  considering  the  making  of  a 
loan.  This  fact  is  one  of  the  many  strong 
arguments  which  we  are  able  to  offer  for 
persons  desiring  absolute  security  to  de- 
posit their  money  with  this  company  on  our 
SECURED  CERTIFICATE  plan.  Every  dol- 
lar thus  deposited  is  secured  by  prime  first 
mortgages  on  improved  and  productive  real 
estate. 


Investment 

Banking 

This  institution  makes 
a specialty  of  handling 
uninvested  funds,  allow- 
ing interest  on  deposits, 
or  providing  investors 
with  carefully  selected 
municipal,  railroad  or 
public  service  corpora- 
tion bonds.  It  loans  on 
the  best  approved  col- 
lateral only,  safeguard- 
ing its  depositors  by 
every  means  known  in 
conservative  banking. 

At  the  same  time,  the 
character  of  its  business 
permits  it  to  offer  attract- 
ive terms  to  depositors. 

Personal  Interviews  and 
Correspondence  Invited. 

Harrislhist  & 
Savings  Bank 

Organized  mN.W.  Harris  & Co.  1883 
Incorporated  1947 

I MARQUETTE  BUILDING 

I I  CHICAGO 

Good. 


The  Savings  Department  of  the  First 
National  Bank  of  Pittsburgh,  Pa.,  has  issued 
a good  two-color  booklet  giving  some  good 
savings  arguments  and  confidence-inspiring 
talk. 


THE  First  National 
Bank//  Chicago 


A Good  Type  Emblem. 


The  Farmers  National  Bank  of  Lexing- 
ton, Okla.,  uses  a monthly  syndicate  house 
organ  called  “The  Fanners  Bank  Notes.” 
Mr.  H.  A.  Hawk,  cashier,  writes  the  ad- 
vertising of  his  own  bank  contained  there- 
in. He  writes  that  he  is  deeply  interested 
in  this  work  and  makes  a daily  study  of 
bank  advertising.  His  ads.  show  evidence 
of  thought  in  their  preparation.  The  copy 
of  two  or  them  is  as  follows: 

THE  SELECTION  OF  A HOME. 

The  selection  of  a bank  should  receive 
the  same  careful  consideration  as  the  selec- 
tion of  a home.  The  bank  is  the  financial 
home.  We  endeavor  at  all  times  to  have 
all  the  people  feel  absolutely  at  home  when 
they  come  to  this  bank. 

Those  who’ve  made  this  bank  their  bank- 
ing home  for  so  many  years,  know  it  to  be 
a good,  safe  one.  and  are  always  glad  to 
come  home  when  they  need  money  to  handle 
their  crops,  or  have  money  to  deposit. 

They  know  the  sterling  worth  of  the  peo- 
ple who  founded  and  managed  this  bank, 
and  that  there  is  always  a warm  welcome 
and  timely  assistance  awaiting  them  here. 

If  you  have  never  visited  our  bank,  or  had 
the  pleasure  of  doing  business  with  us. 
please  consider  this  your  Invitation  to  come 
and  see  us.  We  shill  be  glad  to  see  you. 
ard  want  you  to  make  our  bank  your  head- 
quarters, as  well  as  your  banking  home. 

FARMERS  NATIONAL.  BANK, 

Lexington,  Oklahoma. 

YOUR  EMERGENCY  FUND. 

W’here  is  It?  The  legislature  of  Oklahoma 
is  busy  creating  emergency  funds  and 
emergency  clauses,  why  not  you?  Introduce 
an  emergency  clause  Into  your  life  that  will 
create  and  set  aside  a fund  protecting  you 
and  your  family  In  cases  of  sickness,  acci- 
dent. or  crop  failures. 

Most  any  of  these  are  liable  to  overtake 
you  any  time.  This  good  bank  makes  an 
ideal  depository  for  the  man  who  would 
be  prepared  for  emergencies.  A little  ac- 
count In  bank  comes  in  powerful  handy 
when  the  rainy  days  come. 

Our  reputation  for  square  dealing,  safety, 
strength  and  solidity,  has  extended  far  be- 
yond our  field  of  operation.  Often  tried 
and  never  found  wanting — this  bank  has 
withstood  the  storms  to  which  many  banks 
have  succumbed. 

FARMERS  NATIONAL  BANK. 

Lexington,  Oklahoma. 

The  last  clause  of  this  last  ad.  might 
better  have  been  omitted.  It  is  not  a good 
idea  to  give  people  the  impression  that 
bank  failures  are  common. 


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BANKING  PUBLICITY. 


95 


GERMANIA 
NATIONAL  BA.NI 


"(Brnnaiiia  " 

I"h«  «taiur  “Die  Waclu  am  Rhein”, 
iwtni  m I KM  opposite  "Itincrn 
On  The  Rhein”  vommrmoniu*  lift: 
uniting  nt  the  State*  and  Principal- 
itiw  of  the  ■ Pru«*ian  Empire,  and 
i*  now  known  aa  the 

National 

Statue  of  that  country.  A«  thi» 
Statue.  rvprcaentinK  ri>e  might  and 
nuieary  of  the  German  People, 
ttand*  guard  over  once  dUputed 
HflhotJ,  no  by  it*  organisation 
under  < Government  Super viaion  and 
a directorate  •< imposed  of  lurcm- 
ful  butiiwM  men.  this 

Sauk 

aeeks  to  aafeguard  every  Interest 
of  ita  patron*,  and  as  proof  td  sat- 
isfactory service  rendered  submits 
ita  statement  on  the  following 


“Ausgezeichnet  ” for  Milwaukee. 


Frank  B.  Finch,  advertising  manager  of 
the  Commerce  Trust  Co.,  Kansas  City,  Mo,, 
sends  us  a copy  of  a handsome  new  booklet 
issued  by  the  company  and  also  copies  of 
several  form  letters.  Mr.  Finch  says  that 
the  booklet  is  proving  a “business  getter,” 
and  that  is  not  surprising  as  it  is  well 
written  and  a fine  example  of  the  printer’s 
art.  It  contains  halftone  portraits  of  the 
officers  and  directors  and  a very  full  and 
interesting  outline  of  the  various  depart- 
ments of  the  institution.  A portion  of  one 
of  the  cordial  form  letters  is  as  follows: 


Our  officers  are  men  of  a life  experience 
in  banking  and  finance.  You  are  doubtless 
acquainted  with  our  president.  Dr.  W.  S. 
Woods,  and  know  him  to  have  been  part  of 
the  financial  history  of  this  community  for 
nearly  40  years. 

If  you  have  not  seen  our  magnificent 
banking  home  in  the  Commerce  building, 
Temth  street  floor,  we  hope  you  will  allow 
us  the  pleasure  of  showing  you  through,  in 
the  near  future.  Our  safe  deposit  vaults 
are  the  finest  and  most  modern  used  In 
banking.  You  will  enjoy  a visit  through 
them. 

Trusting  it  will  soon  be  our  privilege  to 
meet  you  In  our  new  offices,  if  we  have  not 
already,  we  beg  to  remain. 

THE  COMMERCE  TRUST  CO. 


INTERNATIONAL  MERCANTILE  MARINE  CO. 


THE  annual  report  of  the  International 
Mercantile  Marine  Company  for  the 
fifth  year  of  its  organization,  ended 
Dec.  31,  1907,  was  submitted  to  stock- 
holders at  their  meeting  June  15.  After  all 
fixed  charges  and  operating  expenses  had 
been  met,  there  remained  a surplus  of  $4,- 
033,730,  compared  with  the  1906  surplus  of 
$5,028,754.  Gross  voyage  earnings  for  the 
year  totaled  $38,253,588,  not  including  the 
operations  of  the  Ley  land  and  National 
lines. 

Miscellaneous  receipts  brought  the  total 
income  up  to  $39,323,609,  from  which  the 
deduction  of  $32,242,542  for  voyage  expenses 
and  operating  and  administrative  expenses 
left  net  earnings  of  $7,081,067. 

Interest  and  discount  on  bonds  and  taxes 
and  interest  on  loans  amounted  to  $3,488,- 
996.  In  commenting  on  the  general  situa- 
tion in  the  Atlantic  trade,  the  report  says: 

The  operating  conditions  of  1907  were  un- 
usually difficult,  particularly  with  regard  to 


labor  troubles  at  various  ports,  which  pre- 
cipitated five  serious  strikes  besides  several 
minor  ones.  These  were  all  not  only  costly 
in  themselves,  but  caused  a material  loss 
of  revenue  through  the  diversion  of  freight 
traffic  from  your  lines. 

The  transatlantic  passenger  traffic  both 
east  and  west  bound  show’s  a material  Im- 
provement as  compared  w’lth  previous  years, 
of  which  your  company  obtained  its  fair 
share,  but  the  revenue  derived  therefrom, 
particularly  during  the  last  half  of  the  year, 
was  extremely  unsatisfactory  on  account  of 
the  great  disturbance  in  rates,  due  to  con- 
ditions beyond  our  control,  but  which  had  to 
be  energetically  met  by  us  In  order  to  main- 
tain our  position  in  the  trade. 


The  company’s  building  programme  is 
being  carried  out  without  curtailment.  It 
is  expected  that  the  first  new  steamer  for 
the  St.  Lawrence  trade  will  be  delivered 
early  in  1909  and  the  second  in  June  of 
the  same  year.  The  new  steamship  Min- 
newaska,  for  the  Atlantic  transport  trade, 
will  be  in  commission  by  the  time  the  sea- 
son of  1909  opens. 


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Genuine  Help  in 

Pushing  Your  Business 

Are  you  pushing  your  business  ? 
Is  your  advertising  as  effective 
as  it  might  be  and  ought  to  be  ? 

If  you  are  not  sure  that  it  is, 
here  is  something  that  will  help 
you.  It  is  a strong  new  book  on 
advertising  by  one  of  the  most 
successful  advertising  writers  in 
the  country.  It  is  entitled — 

“Pushing  Your  Business” 

and  is  written  by  T.  D.  Mac- 
Gregor, Ph.B.,  of  THE  BANK- 
ERS MAGAZINE. 

Is  it  not  worth  one  dollar  to  you  to 
have  at  hand  in  form  convenient  for 
ready  reference  and  constant  use  in  your 
own  business  the  results  of  the  ex- 
perience of  a man  who  has  handled  the  advertising  preparation  of  the  largest 
real  estate  investment  house  in  the  world  and  that  of  an  $86,000,000  National 
bank,  the  largest  financial  institution  in  the  country  outside  of  New  York  ? 

If  you  think  you  can  derive  at  least  a dollar’s  worth  of  good  from  the  ex- 
perience of  such  a man,  epitomized  and  crystallized  in  a 126-page  book  of 
absorbing  interest  and  intensely  practical  value,  it  will  pay  you  to  buy  this 
book.  Read  it  and  you  will  understand  why  the  author  was  able  to  write  a 
single  circular  which  sold  more  than  $60,000  worth  of  stock  in  small  lots  in 
three  weeks.  If  you  don't  absorb  some  of  the  pushing  spirit  of  this  book  and 
turn  it  to  practical  value  in  your  own  business  it  will  be  your  own  fault.  Read 
what  is  being  said  about 44  PUSHING  YOUR  BUSINESS*— 


I have  read  all  the  leading  works  on  ad- 
vertising, but  I believe  this  Is  the  most 
practical  one  I have  seen.  I am  sure  I 
shall  be  a better  advertiser  for  having  read 
It. 

A.  D.  SALLEE,  Adv.  Mgr., 
Mellon  Nat’l  Bank,  Pittsburgh,  Pa. 

I have  carefully  scanned  every  bit  of  ad- 
vice on  advertising  I could  get  hold  of. 
“Pushing  Your  Business”  is  so  much  better 
than  anything  else  I have  ever  seen  that  I 
96 


shall  keep  it  on  my  desk  as  a textbook.  It 
gives  me  inspiration  in  almost  every  sen- 
tence. 

FRED  N.  VAN  PATTEN, 
Real  Estate  Investments,  Syracuse,  N.  Y. 


“Pushing  Your  Business”  is  the  most  In- 
teresting work  of  its  kind  I have  yet  seen. 
JOSEPH  C.  ALLEN,  Treas., 

Hampden  Trust  Company, 

Springfield,  Masa 


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Most  to  the  point  of  anythin?  I have  ever 
seen. 


F.  H.  RUSCOE, 

Ruscoe  School  of  Commerce,  New  Tork. 


Simple  enough  for  a tyro  to  understand, 
and  that  is  just  what  you  want. 

ROBT.  FROTHINGHAM, 
Adv.  Mgr.,  “Everybody’s  Magazine.” 


A book  of  practical  advice  on  advertis- 
ing-well worth  the  price. — “Moody’s  Mag- 
azine,” New  York. 

Written  by  a man  who  knows  how. — Al- 
bany “Argus.” 

A textbook  of  practical  advice  on  adver- 
tising.— “Financier,”  New  York. 


Certainly  a very  valuable  handbook. 

Chancellor  JAMES  R.  DAY, 
Syracuse  University. 

A vast  amount  of  advertising  wisdom. 

W.  N.  AUBUCHON, 

Former  Pres.  Associated  Advertising  Clubs 
of  America. 

A genuine  Inspiration  and  practical  help 
to  every  advertiser. 

FRANK  SOWERS.  Mgr., 
Nassau  Co.  Branch,  Title  Guaranty  & Trust 
Company. 

I have  never  seen  so  many  commonsense 
advertising  facts  in  as  concise  but  compre- 
hensive form. 

N.  LE  VENE, 

J.  Walter  Thompson  Adv.  Co.,  Chicago. 

I consider  Mr.  MacGregor  one  of  the  best 
writers  of  financial  and  real  estate  adver- 
tising in  the  country. 

H.  E.  LESAN,  Pres., 

Lesan -Gould  Adv.  Co., 
New  York  and  St.  Louis. 


Concise  and  thoroughly  practical. — Spring- 
field  (Mass.)  “Republican.” 

A valuable  work  for  all  business  men. — 
Salt  Lake  “Tribune.” 

Direct,  forceful,  clear. — Rochester  “Post- 
Express.” 

The  author  is  a keen  advertising  analyst 
and  authority. — “Illustrated  Footwear  Fash- 
ion,” Boston,  Mass. 

Advanced  ideas  on  every  page. — St.  Paul 
“Pioneer -Press.’’ 

The  book  is  worth  while  for  its  introduc- 
tion alone — as  succinct  a statement  of  the 
general  principles  of  financial  advertising 
as  we  have  seen. 

SIEGFRIED  ADV.  AGENCY, 
New  York. 

Unreservedly  commended  to  the  attention 
of  the  active  managers  of  financial  institu- 
tions.—“The  Financial  Age,”  New  York. 

It  not  only  tells  what  to  do,  but  how  to 
do  it  and  how  NOT  to  do  it. 

W.  H.  KNIFFIN,  JR,  Cashier, 
Home  Savings  Bank,  Brooklyn,  N.  Y.  C. 


4*  pUSHING  YOUR  BUSINESS  ” is  a practical  handbook  for 
all  advertisers,  but  of  special  value  to  banks,  trust  compan- 
ies, investment  houses  and  real  estate  dealers.  * It  consists  of 
nine  chapters,  as  follows:  “The  Technical  Foundation,”  ‘‘Adver- 
tising .Mediums,”  “ Booklets  and  House  Organs,”  “Advertising  a 
Commercial  Bank,”  “Savings  Bank  Advertising,”  “Trust  Com- 
pany Advertising,”  “ Investment  Advertising,’’  “ Real  Estate 
Advertising,”  “and  “Effective  Business  Letters.”  It  contains  126 
pages  and  thirty  illustrations.  Cloth  bound.  PRICE  $1.00 
POSTAGE  PREPAID. 

Send  for  your  copy  to-day  and  let  this  book  help  you  to  push 
YOUR  business. 


THE  BANKERS  PUBLISHING  COMPANY 


99  William  Street, 

1 


New  York 
97 


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GETTING  NEW  BUSINESS. 

Articles  by  Men  Who  Are  Experts  in  This  Line. 


HOW  to  increase  deposits  without  re- 
sorting to  methods  that  may  provoke 
criticism,  is  a problem  that  con- 
fronts many  a bank  manager.  Much  of  the 
work  done  along  this  line,  owing  to  inju- 
dicious methods  employed,  has  served  to 
bring  the  practice  of  personal  solicitation 
of  new  accounts  into  disrepute  in  some 
quarters,  but  we  believe  that  it  is  possible 
to  handle  this  work  in  such  a way  that  it 
will  be  as  clean  and  satisfactory  as  any 
other  feature  of  banking. 


Mr.  Silas  W.  Hatch,  now  of  Washington, 
D.  C.,  has  had  remarkable  success  in  this 
line  of  work,  securing  thousands  of  new 
accounts.  For  the  benefit  of  readers  of  The 
Bankers  Magazine  Mr.  Hatch  outlines  his 
method  as  follows: 

My  method  of  securing  new  depositors  is 
by  personal  solicitation  and  I secure  both 
commercial  and  savings  in  this  way,  sys- 


tematically soliciting  the  head  of  every  house- 
hold, and  every  business  concern,  explaining 
fully  the  facilities,  rate  of  interest,  location, 
safety,  and  advantages,  etc.,  of  the  institu- 
tion I represent. 

You  would  be  surprised  at  the  inactive 
money,  and  permanent  depositors  which  I 
secure  in  this  manner  at  a very  nominal  cost 
and  in  a dignified  and  effective  manner.  I 
find  the  majority  of  people  know  nothing 
whatever  about  banking.  They  know  that  a 
bank  is  a place  to  deposit  money,  and  if 
they  put  It  into  a savings  account  and  it 
stays  long  enough,  they  draw  interest,  and 
if  the  bank  fails  they  lose  it  all.  And  I find 
any  number  of  people  who  keep  their  money 
hidden,  or  who  have  withdrawn  money  from 
the  banks  because  they  did  not  understand 
the  advantages  of  having  it  in  a bank.  My 
past  experience  has  demonstrated  beyond 
any  question  that  these  same  people  in  al- 
most every  case  will  gladly  bank  their  money 
if  they  are  properly  approached  and  the 
advantages,  safety,  and  facilities  of  the  bank 
are  explained  to  them. 

I have  made  a special  study  of  the  proper 
methods  to  be  pursued  for  this  particular 
purpose  and  six  years’  experience  with  trust 
companies,  savings  and  national  banks  has 
demonstrated  beyond  all  question  that  high- 
ly satisfactory  results  can  be  obtained  In 
this  line  of  work  if  proper  and  persistent 
efforts  are  made. 

While  I put  up  five  to  ten  thousand  dollars 
cash  as  a guarantee,  and  make  my  contracts 
with  all  banks  conditionally,  that  they  pay 
me  only  for  actual  results  and  pay  nothing 
whatever  until  accounts  have  been  secured 
and  accepted  by  them,  I find  that  a good 
many  banks  do  not  desire  my  services  ow- 
ing to  their  classing  me  with  individuals 
and  companies  that  have  disgusted  banks 
throughout  the  country  and  whose  methods 
and  principles,  in  my  opinion,  merit  nothing 
but  failure. 

Results  bear  Mr.  Hatch  out  in  his  claims. 
The  United  States  Savings  Bank  of  Detroit, 
Mich.,  makes  a statement  to  the  effect  that 
Mr.  Hatch  secured  6,000  new  depositors  for 
it  by  personal  solicitation  and  that  the  char- 
acter of  the  accounts  is  excellent.  He  se- 
cured 1150  new  depositors  for  the  Union 
Stock  Yards  Bank  of  Buffalo,  N.  Y.;  1000 
new  accounts  for  the  Mercantile  Bank  of 
Baltimore,  Md.;  and  5250  new  depositors 
for  the  United  States  Trust  Company  of 
Washington,  D.  C.,  within  less  than  five 
months. 


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TRAINING  FOR  SUCCESS. 

A Talk  on  Salesmanship  of  Interest  to  Every  Bank  Man  Who  Meets  Customers, 
By  A.  F.  Sheldon,  President  of  the  Sheldon  School. 


INTRODUCTORY  NOTE.  In  accordance 
with  our  purpose  to  present  in  this  depart- 
ment from  time  to  time  articles  of  practical 
value  by  experts  we  are  publishing:  this 
month  an  article  on  salesmanship  by  a man 
who  has  reduced  that  subject  to  a science. 
Some  of  the  readers  of  this  department,  as 
bond  salesmen,  and  solicitors  of  commercial 
accounts,  will  be  directly  interested  in  what 
Mr.  Sheldon  says.  And  we  believe  that 
every  bank  man  who  comes  into  daily  con- 
tact with  his  institution’s  customers — actual 
and  prospective— can  profit  by  reading  this 
article. 

ANY  discussion  of  Salesmanship  should 
properly  begin  with  a definition  of 
the  term  in  order  that  we  may  under- 
stand clearly  what  we  mean  by  it. 

A great  many  people  who  attempt  to  give 
this  meaning  are  in  the  same  position  as 
the  small  boy  who  told  his  teacher  he 
knew  his  multiplication  table  all  right,  but 
couldn’t  find  words  to  express  it. 

Salesmanship  is  not,  as  a leading  whole- 
saler said  the  other  day,  “the  art  of  dis- 
posing of  the  goods  one  has  to  sell.”  Any- 
one can  dispose  of  goods  by  cutting  prices 
and  sacrificing  profits.  He  can  dispose  of 
them  by  giving  them  away,  for  that  matter, 
but  neither  of  these  methods  requires  real 
Salesmanship  nor  proves  profitable  to  the 
seller. 

Salesmanship  is  the  sale  of  goods  for 
profit. 

And  yet  this  definition  defines  but  does 
not  explain. 

Salesmanship  is  something  more  than  the 
exchange  of  goods  for  money.  The  act  of 
exchange  is  not  the  sale  itself,  but  the 
result  of  the  sale.  The  sale  is  really  ac- 
complished when  there  is  a decision  in  the 
mind  to  buy.  The  signing  of  the  order 
and  the  exchange  of  money  for  goods  are 
necessary  details  which  follow  the  decision. 

A man  who  sells  another  man  what  he 
had  already  decided  to  buy  does  not  neces- 
sarily make  a sale.  He  is  probably  only 
taking  an  order.  The  sale  was  made  when 
the  customer  decided  to  purchase. 

The  sale  is  a mental  process;  it  must  take 
place  in  the  mind.  In  order  to  make  the 
sale,  the  salesman  must  alter  the  customer’s 
state  of  mind  until  it  agrees  with  his  own. 
How  is  this  done? 

He  first  secures  attention.  As  he  proceeds 
he  carries  the  mind  of  the  customer  from 
attention  to  interest,  from  interest  to  desire, 
and  finally,  at  the  psychological  moment, 
brings  out  his  strongest  closing  arguments 
and  crystallizes  that  desire  to  have  into  a 
decision  to  buy. 


v No  sale  was  ever  consummated  until  the 
mind  of  the  customer  had  taken  those 
four  steps  of  attention,  interest,  desire,  and 
resolve.  It  is  true  that  in  some  cases  these 


A.  F.  SHELDON 

Who  Has  Proved  the  Truth  of  His  Theories 
About  Getting  New  Business. 


steps  are  almost  simultaneous,  but  they 
take  place  nevertheless,  and  in  the  order 
named. 

There  is  just  one  way  by  which  a sales- 
man, or  anyone  else,  can  change  or  influence 
another’s  state  of  mind. 


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That  is  through  the  power  of  persuasion 
in  one  of  its  many  forms. 

Did  you  ever  realize  this? 

The  only  way  the  mind  can  be  changed  or 
influenced  is  by  persuasion. 

The  word  persuade  is  one  of  the  greatest 
in  the  language.  A man  who  has  the  power 
to  persuade  can  get  almost  anything  he 
wants  in  this  world. 

We  all  try  to  persuade  others,  and  so  far 
as  we  are  able  to  do  so,  we  are  successful. 
The  politician  persuades  the  voters  that 
they  should  elect  him,  the  lawyer  persuades 
the  j ury  that  his  cause  is  right,  the  preacher 
persuades  his  congregation  of  the  correct- 
ness of  his  beliefs,  the  man  in  search  of  em- 
ployment persuades  the  employer  to  take 
him. 

Since  a sale  is  a mental  process,  since  a 
desision  can  only  be  reached  in  the  mind, 
and  since  the  mind  can  only  be  influenced 
by  persuasion,  we  reach  the  conclusion: 

“Salesmanship  is  Persuasion.” 

Our  lives  are  made  up  of  a succession  of 
efforts  to  persuade.  In  the  performance  of 
our  duties  we  endeavor  to  persuade  those 
above  us  that  we  are  competent  and  efficient. 
The  most  trivial  acts  of  our  lives  are 
prompted  by  a desire  to  please,  to  persuade 
some  one  that  we  are  worth  some  atten- 
tion or  consideration. 

We  do  not  persuade  alone  by  language. 
There  are  many  other  things  besides  words 
which  contribute  to  the  power  of  persuasion. 
The  great  actor  persuades  his  audience 
that  he  is  a great  actor,  but  he  does  not  do 
so  by  words  of  his  own;  he  speaks  the 
thoughts  of  other  men;  he  persuades  by  his 
manner  of  speaking,  his  manner  of  acting, 
and  by  some  indescribable  force  of  his  own 
personality  with  which  he  imbues  his  work. 

Selling  a Bond  Issue. 

The  salesman  who  sells  a bond  issue  does 
not  persuade  simply  because  he  said  cer- 
tain words.  Many  another  could  have  said 
the  same  things  and  yet  not  have  made  the 
sale. 

It  is  the  way  he  said  them  almost  as  much 
as  the  words  themselves.  It  was  his  bear- 
ing, his  appearance,  his  enthusiasm,  his 
sincerity,  his  health,  his  mental  acuteness, 
his  determination,  his  apparent  reliability. 
All  these  things  and  many  more,  in  a word, 
Pertonality,  contributed  to  the  salesman’s 
power  of  persuasion  and  enabled  him  to 
make  the  sale. 

But  right  here  some  one  asks  if  this 
“power  to  persuade”  which  we  have  named 
as  the  essence  of  salesmanship,  is  not  an 
inborn  trait  or  gift  in  one  who  possesses 
it?  Some  one  quotes  that  old  saying  “Sales- 
men are  born,  not  made,”  and  wants  to 
know  if  that  saying  isn’t  true.  And  if  it 
isn’t,  then  why? 


So  we  may  as  well  discuss  this  “natural 
born”  salesman  right  here.  Strictly  speak- 
ing, the  term  “natural  bom  salesman”  has 
about  as  much  significance  as  a “round 
circle.”  Of  course  all  salesmen  are  “born,” 
and  if  born,  are  certainly  “natural.”  How 
could  any  normal  individual  be  anything 
else  but  “natural  born”?  As  a matter  of 
fact  the  only  “made”  salesman  we  know 
of  is  the  wooden  Indian  in  front  of  the  cigar 
store. 

The  first  part  of  the  saying,  “Salesmen 
are  born,  not  made,”  is  undoubtedly  true. 
The  phenomenon  of  being  born  seems  to  be 
common  to  all  men,  salesmen  being  no  ex- 
ception to  the  general  rule.  With  the  lat- 
ter part  of  the  old  adage,  however,  there 
are  now  many  people  ready  to  join  issue. 

No  one  has  ever  accused  lawyers,  doctors, 
editors,  preachers,  or  successful  business 
men  of  being  “born,  not  made.”  Poets  and 
salesmen  are  the  only  exception  to  the  gen- 
eral rule.  They  alone  of  men,  we  hear, 
do  not  need  to  go  through  the  great  mak- 
ing process  Nature  and  circumstances  pro- 
vide for  other  men.  They  are  not  made — 
no,  no;  they’re  just  born;  they  merely  hap- 
pen— arrive  at  unexpected  times  and  places; 
there  is  no  special  reason  for  them;  they 
are  not  subject  to  natural  laws,  do  not 
move  from  cause  to  effect.  In  short,  they 
are  unusual,  and  can  be  explained  only  on 
the  assumption  that  they  are  “born.” 

Does  such  talk  sound  reasonable? 

We  all  Know,  when  we  stop  to  think  of 
it,  that  the  real  salesman’s  power  lies  in 
certain  traits  of  personality.  In  some  in- 
dividuals, these  traits,  through  environment 
and  cultivation,  have  been  developed  into 
greater  prominence. 

But  all  persons  are  “natural  bom”  sales- 
men in  the  sense  that  they  have  within 
themselves  the  vein  of  the  positive  qualities. 
This  vein  of  the  positive  is,  however,  lost, 
in  many  cases,  to  the  individuals  unless  they 
are  helped,  through  simple  analysis  and 
careful  instruction,  to  find  it. 

The  Power  of  Persuasion. 

All  of  which  is  said  in  full  knowledge 
of  the  fact  that  it  takes  longer  to  develop 
to  a high  degree  the  power  of  persuasion 
in  some  than  in  others.  On  the  other  hand 
there  are  thousands  who  possess  the  power 
of  persuasion  but  who  do  not  know  it  be- 
cause they  never  have  given  themselves  a 
trial. 

With  all  respect  to  the  “self-made”  man, 
it  is  nevertheless  true  that  every  man  has  a 
great  deal  of  help  outside  of  himself  in  his 
making.  In  fact,  no  man  probably  would 
ever  have  got  very  far,  if  he  hadn’t  re- 
ceived a good  deal  of  help.  The  difference 
between  the  strong  man,  who  is  pointed  out 
as  a “self-made”  man,  and  the  man  who  is 


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101 


not  so  strong,  is  simply  this:  The  “self- 
made"  man  was  wise  enough  to  avail  him- 
self of  the  help  that  came  within  his  reach, 
while  the  other  man  was  not. 

Jeffries  was  a “natural-born"  prize 
fighter,  but  he  never  would  have  won  the 
belt  and  retained  it  for  several  years  had 
be  not  trained  to  the  highest  possible  de- 
gree of  proficiency  the  natural  powers  which 
nature  had  given  him.  This  is  just  so  in 
Salesmanship;  the  “natural  born"  salesman 
can  be  made  a prize  winner  of  the  highest 
type  if  be  will  study  the  Science  of  Sales- 
manship and  train  to  the  highest  possible 
degree  of  proficiency  his  natural  talents  and 
powers. 

A more  striking  illustration  is  seen  in 
the  case  of  Helen  Keller.  All  the  world 
knows  the  story  of  that  unfortunate  girl — 
deaf,  dumb  and  blind  from  infancy — and 
how  the  patient  application  of  the  scientific 
principles  governing  the  development  of  the 
objective  senses  has  produced  the  marvelous 
result  of  transferring  the  sense  of  sight, 
the  sense  of  hearing,  and  the  power  of 
speech  to  the  tips  of  her  fingers. 

If  such  a wonderful  transformation  can 
be  effected  in  the  case  of  one  so  handi- 
capped, what  man,  in  the  full  possession  of 
his  objective  faculties,  will  say  that  he  can- 
not rise  above  his  present  environments? 

Every  man  is  a bundle  of  wonderful 
possibilities  if  only  he  will  develop  the  pos- 
sibilities. 

Education  is  the  alterating  force  that 
brings  out  the  latent  faculties. 

Even  the  “natural  born”  salesman  is  not 
perfect.  He  will  respond  to  the  alterating 
forces.  There  is  no  good  salesman  but  can 
be  a better  salesman. 

Permanent  and  increasing  success  in 
salesmanship  depends  upon  true  education. 
Then  the  question  comes:  What  shall  con- 
stitute true  education?  How  may  a man 
train  himself  so  that  he  will  possess  the 
“power  to  persuade”  which  is  salesmanship 
in  the  abstract? 

True  education — the  kind  of  education 
that  should  go  on  all  through  life,  consists 
of  two  processes;  First,  the  eduetive  or 
drawing-out  process;  Second,  the  instructive 
or  filling-in  process.  The  one  is  as  im- 
portant as  the  other. 

A man  is  made  up  of  numerous  faculties 
and  qualities  of  the  body,  the  intellect,  the 
emotions,  and  the  will.  These  faculties  and 
qualities  may  be  either  positive  or  negative. 
True  education  draws  out — educts — the  pos- 
itive faculties  and  qualities.  Any  education 
that  drew  out  the  negatives  would  be  false 
education.  The  law  of  healthy  development 
makes  it  imperative  for  men  ever  to  be 
filling  in  useful  knowledge  and  ever  draw 
ing  out  the  positive,  good  faculties  and 
qualities  of  the  body,  the  intellect,  the 


emotions  and  the  will.  As  the  positives  are 
drawn  out  the  negatives  disappear,  as  dark- 
ness vanishes  before  light. 

We  have  mentioned  the  positive  qualities. 
Let  us  see  what  we  mean  by  these. 

Within  each  of  us  there  is  the  better  man 
and  the  bad  man.  The  thing  to  do  is  to 
make  the  better  man  boss.  The  positives 
are  the  attributes  of  the  good  man,  the 
strong  man,  the  efficient  man:  the  negatives 
are  the  attributes  of  the  bad  man,  the 
weak  man,  the  inefficient  man. 


Human  Positives  and  Negatives. 


This  law  of  duality  of  positives  and  nega- 
tives runs  all  through  nature.  We  have 
the  positive  in  light,  the  negative  in  dark- 
ness, the  positive  and  negative  poles  of  the 
magnet,  etc. 

And  the  law  of  positives  and  negatives 
runs  all  through  man  in  his  body,  mind  and 
soul. 

One  cannot  but  admit  the  overwhelming 
importance  as  factors  in  success  of  such 
positives  as  tact,  good  judgment,  self-re- 
liance, initiative,  courage,  loyalty  and  the 
many  other  similar  qualities. 

To  eat,  drink,  sleep,  think  and  live  right- 
ly is  to  have  health,  which  means  endurance. 
To  develop  such  positives  as  memory, 
reason,  perception,  observation,  imagina- 
tion, is  to  develop  ability.  The  development 
of  the  great  emotive  qualities  such  as 
honesty,  courage,  enthusiasm,  loyalty,  means 
dependability — reliability.  The  develop- 
ment of  the  will,  the  master  that  drives 
you  on  to  initiative  and  accomplishment — 
means  action. 

And  the  man  who  has  these  four  essen- 
tials of  efficiency — endurance,  ability,  relia- 
bility and  action  is  invariably — he  must  be — 
a successful  man. 

A man  must  not  only  have  knowledge,  but 
he  must  be  able  to  use  it:  he  must  not  only 
know  what  it  takes  to  make  a man,  he  must 
be  a wan  before  he  is  truly  educated,  before 
he  will  achieve  a real  success. 

Development  of  the  intellectual  alone  has 
never  spelled  success.  Development  of  the 
body,  of  the  heart,  of  the  will  alone  has 
never  spelled  success.  It  takes  all  four. 

And  the  most  important  thing — the  fact 
that  must  never  be  lost  from  sight — is  that 
these  positives,  under  a true  system  of  ed- 
ucation, may  be  developed  by  every  indi- 
vidual. 

Nothing  is  more  certain  than  that  per- 
manent and  increasing  success  depends  upon 
true  education — not  necessarily  collegiate 
education,  as  we  find  that  many  of  our  best 
men  are  not  college  men.  They  are,  how- 
ever, truly  educated  from  the  standpoint  of 
latent  faculties  and  qualities  and  they  have 
also  in  the  great  school  of  life,  filled  in 
much  useful  knowledge,  knowledge  which 


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they  could  use  in  their  business  from  day  to 
day.  They  have  applied  themselves  more 
than  the  ordinary  individual  is  willing  to 
apply  himself  to  the  end  of  both  processes 
of  education — education  and  instruction. 

In  all  salesmanship  there  are  four  factors, 
the  salesman,  the  customer,  the  goods  and 
the  sale.  Each  of  these  enters  into  every 
transaction,  and  must  be  accounted  for. 

As  to  the  customer,  the  salesman  must 
know  how  to  find  him,  how  to  read  and 
handle  him,  how  to  size  up  men,  how  to  read 
character  and  how  best  to  appeal  to  the 
various  types  of  temperament  with  which 
he  comes  in  contact. 

As  for  the  goods,  it  goes  without  saying 
the  salesman  must  thoroughly  understand 
the  thing  he  is  selling,  he  must  not  only 
understand  the  goods  and  analyze  them  into 
their  selling  points,  but  he  must  be  able 
to  express  forcibly  and  in  a persuasive  man- 
ner his  knowledge  of  them. 

The  sale  takes  place  in  the  mind,  it  is  a 
mental  process  in  which  there  are  four 
steps  and  only  four,  which  constitute  the 
mental  law  of  sale.  The  methods  whereby 
the  sales  can  attract  attention , evoke  inter- 
est, arouse  desire , and  awaken  resolve  in 
the  customer  are  capable  of  reduction  to 
exact  rules  and  with  these  every  salesman 
should  be  familiar. 

Last,  and  most  important  of  all,  the 
salesman.  Unless  he  is  to  be  the  weak  one 
in  this  group,  he  must  have  certain  char- 
acteristics and  abilities  on  which  we  have 
briefly  touched.  He  must  be  a well-rounded, 
symmetrical  man  if  he  is  to  be  a success 
in  business.  How  is  he  to  become  such? 
By  true  education,  such  as  we  have  already 
defined. 


Education  for  Business. 

What  should  enter  into  a system  of  ed- 
ucation for  a business  career?  First  of  all, 
I would  mention  the  science  of  self-develop- 
ment, or  character  building,  an  eductive 
process  of  true  education. 

Along  this  line  the  individual  should 
become  familiar  first  with  the  basic  positive 
faculties  and  qualities  of  the  body,  the  in- 
tellect, the  emotions  and  the  will,  which 
when  developed  produce  a strong  person- 
ality. He  should  become  thoroughly 
familiar  with  their  exact  scope  and  realize 
fully  their  commercial  value.  He  should 
know  of  exact  practical  methods  for  the  de- 
velopment of  these  faculties  and  qualities. 

Then  there  must  be  instructive  training. 
Here  enters  the  salesman’s  specific  know- 
ledge of  his  own  business,  of  his  goods,  of 
the  field,  of  local  and  national  sales  con- 
ditions, of  the  relation  of  advertising  to 
sales — all  the  detailed  information  which 
makes  the  trained  man  valuable  to  his 
house.  There  are,  of  course,  many  other 


kinds  of  instructive  knowledge  which  the 
salesman  should  and  does  have,  but  this 
will  suffice  to  illustrate  the  distinction  be- 
tween the  two  divisions  of  the  educational 
process. 

How  are  these  to  be  gained?  By  study, 
by  conscious  building  up  of  the  powers, 
resources  and  equipment  of  the  individual. 

A man  is  made  after  he  is  born.  He  be- 
gins with  little  faith — he  develops  great 
faith;  he  begins  with  little  courage — he  de- 
velops great  courage;  he  begins  with  little 
intelligence — he  develops  great  intelligence; 
he  begins  with  little  love — he  develops  great 
love;  he  begins  with  a little  business — he 
develops  into  a merchant  prince. 

All  men  are  natural  born. 

But  watch  the  natural  born  man  who  has 
cultivated  the  study  habit.  With  it  comes 
the  ability  to  analyze  his  own  character 
and  personality  and  to  consciously  watch 
its  development.  How  quickly  he  passes  by 
his  fellows!  Ere  long,  we  see  him  on  the 
mountain  tops.  The  cream  of  the  business 
world  is  bound  to  rise.  It  won’t  stay  down. 


INDIA’S  POSTAL  BANKS. 

CONSUL-GENERAL  WILLIAM  H. 
MICHAEL  of  Calcutta  reports  that 
the  following  rules  governing  deposits 
in  the  post-office  savings  banks  of  India 
went  into  effect  on  April  1,  1908: 

(1)  The  agent  of  a female  depositor 
withdrawing  money  from  her  account  will 
be  required  to  certify  on  the  application 
for  withdrawal  that  the  depositor  is  alive 
and  sane. 

(2)  Every  suboffice  which  does  savings- 
bank  work,  instead  of  only  certain  selected 
suboffices,  will  repay  deposits  without  pre- 
vious reference  to  the  head  office,  provided 
that  funds  are  available  in  the  suboffice.  In 
the  case,  however,  of  applications  for  with- 
drawal from  minors’  accounts,  security  de- 
posit accounts,  and  conjoint  accounts  pay- 
ment will,  as  at  present,  not  be  made  un- 
til a warrant  of  payment  is  received  from 
the  head  office. 

(3)  The  limit  of  the  amount  of  with- 
drawals without  notice  from  the  deposits 
at  call  at  the  credit  of  a public  or  a con- 
joint account  has  been  altered  from  2,000 
rupees  ($648.87)  within  12  consecutive 
months  to  1,000  rupees  ($324.43)  within  a 
calendar  month. 

(4)  Deposits  in  security  deposit  ac- 
counts will  be  allowed  at  call  and  not  sub- 
ject to  six  months’  notice  of  withdrawal. 


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DEPOSIT  INSURANCE 


IN’  an  address  before  a meeting  of  Group 
Two  of  the  Bankers’  Association  of 
the  State  of  Illinois,  held  at  Peoria  on 
June  11,  James  B.  Forgan,  president  of  the 
First  National  Bank  of  Chicago,  discussing 
the  proposal  to  insure  bank  deposits,  said: 

“Careful  consideration  of  these  matters 
cannot  fail  to  reveal  the  injustice  of  tax- 
ing the  sound  and  conservatively  managed 
banks  which  are  in  the  great  majority,  for 
the  benefit  of  the  few  that  are  unsound  and 
recklessly  managed.  The  sound  banks  do 
not  need  and  would  never  have  any  call 
on  the  guaranty  fund  to  which  they  would 
contribute,  while  the  unsound  and  reckless- 
ly managed  institutions  would  build  up 
their  business  on  both  sides  of  their  bal- 
ance sheets,  i.  e.f  in  both  their  deposits  and 
their  loans,  by  granting  their  customers 
accommodations  contrary  to  all  sound 
banking  principles  and  methods.  The  un- 
sound banks  would  actually  take  business 
away  from  the  sound  ones  with  specious 
promises,  to  which  conservatively  managed 
banks  would  not  resort,  and  on  reckless 
terms,  with  which  they  would  not  com- 
pete, while  to  the  extent  of  their  contribu- 
tions to  the  guaranty  fund  the  sound  insti- 
tutions would  support  the  unsound  in  their 
recklessness,  besides  giving  them  a standing 
and  credit  which  they  could  not  otherwise 
obtain.  By  a wide-open  policy  as  to 
credits  granted,  a reckless  banker  could 
build  up  a mushroom  business,  with  which 
no  Examiner,  Comptroller,  Clearing  House 
Committee,  nor  any  other  authority  might 
find  good  grounds  for  interfering  otherwise 
than  by  criticism,  expostulation  and  advice, 
until  some  such  occurrence  as  the  failure  of 
some  large  customer  would  compel  the  bank 
to  stop,  and  so  uncover  the  whole  festering 
cesspool  of  bad  credits  and  reckless  bank- 
ing. Shrewdness  and  good  judgment  might 
have  anticipated  the  final  outcome,  but  no 
one  would  be  willing  to  assume  the  re- 
sponsibility of  taking  drastic  action  on  the 
strength  of  his  fears.  No  system  of  super- 
vision by  bank  examination,  however  perfect, 
will  ever  make  an  honest  man  out  of  a 
rascal,  and  has  not  Solomon  said:  Though 
thou  shouldest  bray  a fool  in  a mortar 


among  wheat  with  a pestle,  yet  will  not 
his  foolishness  depart  from  him. 


“Anything  that  can  be  legally  and  equitably 
done  to  protect  the  depositors,  to  raise  the 
standard  of  the  banks  and  of  the  men  en- 
gaged in  the  banking  business,  to  protect 
the  honest  banker  against  the  dishonest 
one,  to  keep  those  engaged  in  the  business 
honest  and  to  punish  those  who  are  dis- 
honest, should  be  enacted  into  law,  and  the 
laws  for  such  purposes  cannot  be  made  too 
rigid.  But  to  attempt  to  make  all  banks 
equally  safe  by  passing  a law  that  would 
establish  an  artificial  credit  for  the  in- 
competent and  the  dishonest,  enabling  them 
to  offer  all  sorts  of  specious  inducements 
to  the  public  for  business,  and  thus  creat- 
ing illegitimate  and  ruinous  competition 
against  sound  and  conservative  bankers, 
would  have  in  the  long  run  contrary  and 
disastrous  results.  By  the  passage  of  such 
a law  the  rascal  would  be  tempted  to  be- 
come a national  banker,  and  to  cover  him- 
self with  a mantle  of  credit  which  other- 
wise it  would  be  impossible  for  him  to  ac- 
quire and  which  would  be  provided  for  him 
by  and  at  the  expense  of  all  the  good  na- 
tional banks  in  the  country.  This  would 
not  be  a ‘square  deal.’  It  would  place  a 
premium  on  dishonesty  and  reckless  bank- 
ing and  tend  to  abate  the  ambition  of  good 
bankers  everywhere  to  excel  in  their  calling 
and  to  acquire  that  good  name,  which  Sol- 
omon says,  ‘Is  rather  to  be  chosen  than 
great  riches.’  The  proposal  is  abhorrent 
to  business  sense  as  well  as  to  justice  and 
equity. 

* * * « * 

“The  way  to  promote  sound  banking  is 
to  establish  sound  principles  in  our  bank- 
ing system  and  methods;  to  encourage  hon- 
esty and  conservatism  in  bank  management 
and  to  discourage  the  reverse;  to  recognize 
honesty,  ability,  experience  and  training 
where  they  exist;  and  to  reward  such  bank- 
ers as  have  these  virtues  with  the  pre- 
eminence which  is  their  due  and  with  the 
confidence  to  which  they  are  entitled.  These 
qualities  in  bank  management  are  funda- 

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mental  to  the  promotion  of  sound  banking. 
What  is  there  that  will  tend  to  promote 
sound  banking  in  the  proposal  to  make 
the  bank  of  ample  responsibility  and  with 
honest,  capable,  shrewd  and  sagacious  man- 
agement no  better  in  the  estimation  of  the 
public  than  the  one  having  inadequate  re- 
sponsibility and  dishonest  and  incapable 
management?  Is  it  not  reasonable  to  as- 
sume that  it  would  have  the  very  reverse 
effect,  and  tend  to  reduce  all  to  the  level 
of  the  least  meritorious?” 


ORIGIN  OF  THE  ALDRICH  BILL. 

FROM  the  standpoint  of  financial  history 
purely,  the  following  from  the  New 
York  “Journal  of  Commerce”  of  June 
6 will  be  found  of  interest: 

“Senator  Aldrich,  in  supporting  his  bill, 
declared  in  so  many  words  that  he  knew  of 
‘no  bank  or  bank  man  who  is  in  favor  of 
the  bill,’  and  that  *the  banks  throughout 
the  country  are  against  it.’  It  is  notorious 
that  the  Senate  and  House  were  flooded 
with  protests  from  the  bunking  community 
and  the  commercial  interests  against  this 
*long  stride  forward  in  rounding  out  and 
perfecting  the  national  banking  system. 
At  the  same  time  Mr.  Aldrich  knew  when 
he  made  his  statement,  and  many  others 
know  now,  that  his  bill  bad  its  origin  and 
its  chief  backing  from  certain  powerful 
banking  interests  in  this  city,  known  as  the 
Standard  Oil  and  Morgan  interests,  which 
have  a much  larger  concern  in  the  market 
for  securities  than  in  the  security  of  bank 
currency.  There  is  no  reason  to  deny  that 
these  men  feel  assured  that  the  bond- 
secured  currency  is  safe  and  they  may  be 
convinced  that  it  is  good  for  the  country, 
but  if  they  have  any  conviction  of  the  kind 
it  is  reached  under  the  sway  and  bias  of  a 
self-interest  centered  in  their  own  financial 
advantage.” 


INTERNATIONAL  BANKING  AND 
FOREIGN  TRADE. 

AT  the  last  annual  convention  of  Ala- 
bama bankers  an  interesting  address 
on  “International  Banking”  was  de- 
livered by  S.  D.  Scudder,  of  the  Interna- 
tional Banking  Corporation  in  New  York. 
After  describing  the  operation  of  foreign 
exchange  Mr.  Scudder  said: 

“ I have  friends  in  a foreign  port  who 
would  gladly  procure  there,  if  they  could, 
some  exchange  in  dollars  with  which  to 
pay  for  goods  bought  from  their  Boston 
house.  But  that  foreign  country  sells  and 
exports  annually  so  small  a quantity  of 
merchandise  to  the  United  States,  because 
of  the  prohibitive  tariff  laws,  that  no  such 


exchange  is  to  be  had,  and  thus  it  hap- 
pens that  settlements  even  for  goods  im- 
ported there  from  the  United  States  must 
be  made  through  London.  My  friends  set- 
tle with  their  own  house  in  Boston  by  pur- 
chasing pounds  sterling  drafts  on  London. 
The  Boston  people,  when  they  receive  these 
drafts,  then  sell  them  to  a foreign  ex- 
change banker  for  so  many  dollars.  Thus 
London  gets  a tribute  on  business  which 
never  originated  there,  on  goods  which 
never  went  there  and  on  a settlement 
which  but  for  our  prohibitive  policy  would 
naturally  have  been  made  direct.  You  may 
ask:  ‘Supposing  an  American  bank  or  its 
branch  were  located  there,  would  Europe 
still  collect  this  tribute?’  I reply,  yes,  un- 
der our  present  prohibitive  trading  laws 
the  larger  portion  of  all  commissions  must 
necessarily  go  abroad,  because  in  the  ab- 
sence of  sufficient  export  trade  from  such 
a place  to  the  United  States  any  American 
bank  or  branch  there  would  itself  be  com- 
pelled to  settle  with  its  United  States  head 
office  through  Europe.  Supposing  for  the 
cotton  you  take  abroad,  it  were  permitted 
to  bring  back  some  goods  to  be  sold  here 
at  a reasonable  profit,  wouldn’t  your  cotton 
shipment  and  the  money  it  represents  ‘be 
earning  its  way  back,’  so  to  speak?  But 
our  high  protective  tariff  forbids  the  im- 
portation, and  so  you  are  compelled  to  ask 
that  gold  be  sent  back,  not  only  at  great 
cost  and  loss  to  you  in  dollars  and  cents, 
but  also  in  ultimate  loss  of  trading  op- 
portunity with  the  peor-le  you  have  been 
selling  your  cotton  to.  Already  we  see  cot- 
ton fields  springing  up  where  none  were 
thought  possible  before  Wheat  growing 
and  cattle  raising  is  now  going  on  in  coun- 
tries which  up  till  now  we  have  thought 
absolutely  independent  upon  our  supplies. 
I am  not  a free  trader,  but  I want  our 
people  to  awaken  to  the  danger  that 
threatens.  The  crisis  which  the  whole 
world  is  now  passing  through  is  due  large- 
ly to  our  action  here  in  America  during 
the  past  three  decades.  The  impression 
has  been  gradually  gaining  abroad  that  we 
want  the  earth ; and  when  you  consider 
that  we  are  simply  one  n ember  of  a great 
and  inseparable  family,  this  is  a mighty 
bad  thing  to  get  into  the  heads  of  the 
rest..  The  upbuilding  of  an  artificial  wealth 
in  this  country  bv  an  excessively  high  tar- 
iff for  a time  seemed  attractive,  but  the 
bringing  to  light  of  the  true  facts  has 
now  disillusioned  all  conservative  and  pa- 
triotic citizens.  Hipb  protection  if  persisted 
in  will  finally  kill  all  our  remaining  in- 
ternational facilities.  Gradually  but  surely 
if  our  present  artifical  system  is  continued 
we  will  be  driven  within  our  own  walls 
bv  the  other  members  of  the  family  of  na- 
tions. Comparatively  few  in  this  country 
outside  of  those  who  live  on  the  Coast 


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CURRENT  OPINION. 


105 


realize  that  the  greatest  war  in  history 
is  now  on-  Not  a battle  fought  with  pow- 
der and  swords  as  of  old,  but  a war  of 
trade  and  barter,  a peaceful  war  as  com- 
pared with  the  bloody  conflict  of  by-gone 
ages,  but  none  the  less  decisive — a struggle 
which  will  determine  the  fate  of  many  peo- 
pif. 

It  was  a constant  source  of  astonish- 
ment to  roe  that  the  American  merchant 
and  the  American  manufacturer  had  not 
that  financial  backing  abroad  which  was 
vouchsafed  to  the  business  men  of  other 
lands  by  their  own  banks s Not  that  there 
was  then  any  scarcity  in  the  United  States 
of  private  firms  and  even  banks  employed 
in  international  banking.  But  I found  that 
almost  without  exception  these  firms  and 
banks  either  were  of  foreign  origin,  pos- 
sessed a foreign  partnership  or  else  repre- 
sented on  this  side  some  foreign  bank  or 
banking  house.  At  the  same  time  it  was 
strongly  impressed  upon  me  that  by  far 
the  larger  portion  of  all  strictly  commer- 
cial international  transactions  on  this  side 
pertained  to  exports  and  not  to  imports. 
And  so  the  conviction  came  that  the  rea- 
son for  the  existence  in  our  land  of  these 
great  foreign  banks  and  foreign  private 
houses  was  primarily  because  of  the  ex- 
port trade  which  we  were  furnishing  to 
those  countries.  If  you  look  back  upon 
history  you  will  find  that  particular  nation 
in  the  foremost  ranks  of  banking  which 
has  possessed  the  most  liberal  trade  laws.” 


FAVORS  CREDIT  CURRENCY. 

HON.  JOHN  W.  WEEKS,  vice-president 
of  the  First  National  Bank  of  Bos- 
ton, and  recognized  as  one  of  the 
ablest  members  of  the  Monetary  Commis- 
sion appointed  at  the  recent  session  of 
Congress,  is  quoted  as  follows  in  a recent 
number  of  the  “Boston  News  Bureau”: 

“I  am  personally  very  friendly  to  credit 
currency.  To  my  mind  it  presents  a most 
desirable  policy,  and  I undertake  to  say 
that  as  soon  as  the  prejudice  of  those 
who  are  familiar  with  other  forms  of  cur- 
rency is  overcome  it  will  have  many  ad- 
vocates and  the  opposition  now  existing 
toward  credit  currency  will  disappear.  But 
abrupt  changes  in  such  n delicate  subject 
as  currency  are  not  desirable,  and  any 
changes  we  conclude  to  make  which  will 
lead  us  from  a bond-secured  currency  to  a 
credit  currency  should  be  made  by  gradual 
stages,  so  that  the  people  may  become  used 
to  the  new  form  and  thoroughly  satisfied 
that  it  is  sound  and  workable.” 


NEW  COUNTERFEIT  $10  GOLD 
CERTIFICATE. 

ACT  of  July  12,  1882;  series  of  1907; 
check  letter  “D;”  face  plate  number 
7;  W.  T.  Vernon,  Register  of  the 
Treasury;  Charles  H.  Treat,  Treasurer  of 
the  United  States;  portrait  of  Hillegas. 
The  number  of  the  sample  before  me  Is 
A1437936. 

The  note  is  a photomechanical  produc- 
tion on  two  pieces  of  paper  with  distributed 
red  and  blue  silk  fibre,  which  is  much  finer 
and  more  hair-like  than  the  genuine.  The 
color  of  the  seal,  denominational  “X”  and 
back  are  all  darker  than  the  genuine.  The 
portrait  of  Hillegas  is  so  poorly  executed 
that  it  should  attract  instant  attention  and 
establish  the  spurious  character  of  the 
note.  In  the  upper-border  design  on  the 
face  of  the  genuine  note  under  the  line  “This 
certifies  there  have  been  deposited  in  the 
Treasury  of  the”  there  is  an  ornamental 
arc  finished  at  each  end  by  a scroll.  In 
the  genuine  this  arc,  which  is  about  one- 
sixteenth  of  an  inch  wide,  is  marked  by  a 
series  of  distinct  and  regular  perpendicu- 
lar lines.  In  the  counterfeit  this  arc  looks 
as  if  it  had  been  executed  with  a pen, 
is  blurred  and  scratched,  and  the  individu- 
ality of  the  perpendicular  lines  almost  dis- 
appears. The  general  effect  of  the  back  of 
the  note,  aside  from  the  darker  color,  is 
better  than  the  face  but  close  inspection  dis- 
closes work  so  inferior  that  it  cannot  be 
mistaken  as  a genuine  production.  This 
note  made  its  appearance  in  New  York 
and  the  division  is  under  obligation  to  Mr. 
Charles  M.  Chatfield,  assistant  paying  teller 
in  the  treasurer’s  office  of  the  Erie  Railroad 
Company  for  the  detection  and  first  sample 
of  this  counterfeit. 

The  note  is  sufficiently  deceptive  to  make 
it  dangerous  among  inexperienced  or  care- 
less handlers  of  monev  and  all  notes  of  this 
issue  should  be  carefully  scrutinized. 


GOLD  FROM  ALASKA. 


THE  steamship  Senator,  the  second  of 
the  gold  fleet  out  of  Nome,  Alaska, 
reached  Seattle,  Wash.,  July  1,  with 
$367,000  in  bullion,  and  on  July  2 the  steam- 
ship Umatilla  arrived  from  the  same  point 
with  $125,000  on  board.  Commenting  on 
the  recent  gold  receipts  the  Seattle  Post- 
Intelligencer  says:  “So  common  has  it  be- 
come for  Alaska  ships  to  bring  to  Seattle 
gold  valued  at  a million  or  more,  that  it 
will  be  necessary  to  ship  something  that 
sounds  like  a billion  before  any  great  ex- 
citement can  be  created.” 


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JOAQUIM  NABUCO 

Brazilian  Ambassador  to  the  United  States. 


106 


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IX  the  century  that  has  passed,  the  development  of  North  America  has,  on  the  whole,  pro- 
ceeded faster  than  the  development  of  S >uth  America;  hut  in  the  century  that  has  now 
opened  I believe  that  no  other  part  of  the  world  will  see  such  extraordinary  develop- 
ment in  wealth,  in  population,  in  all  that  mikes  for  progress,  as  will  he  seen  from  the 
northern  boundary  of  Mexico  through  all  Central  and  South  America. — Theodore  Roose - 
re//. 


THE  BRAZILIAN  AMBASSADOR  TO  THE 
UNITED  STATES. 


BRAZIL  sends  as  its  Ambassador  to  the 
United  States  Mr.  Joaquim  Nabuco,  a 
man  of  distinguished  ancestry,  wide 
experience  in  parliamentary  life  and  in  the 
field  of  diplomacy,  and  of  high  attainments 
in  scholarship. 

Mr.  J.  Nabuco  was  born  in  Recife, 
Brazil,  in  1849.  He  is  a son  of  the  late 
Senator  Nabuco,  chief  of  the  Liberal  Party 
in  Brazil  during  a period  of  Dom  Pedro 
II.’s  reign.  Both  his  grandfather  and  his 
great  granduncle  'were  also  senators,  so 
that  he  represented  in  the  Brazilian  Parlia- 
ment, when  he  entered  it,  the  fourth  genera- 
tion of  his  name,  the  only  such  instance 
under  the  Empire.  On  his  mother’s  side 
he  is  a great  nephew  of  the  Marquis  of 
Recife,  who  saved  the  national  unity  of 
Brazil  in  1824.  He  is  married  to  a great 
niece  of  Viscount  Itaborahy,  for  thirty 
years  chief  of  the  Conservative  Party. 

In  1871  Mr.  Nabuco  got  his  degree  at  the 
Faculty  of  Law.  In  1876  he  was  appointed 
attache  to  the  Brazilian  Legation  in  Wash- 
ington. In  1878,  on  the  death  of  his 
father,  he  was  elected  to  Parliament  and 
for  years  devoted  himself  entirely  to  the 
cause  of  the  abolition  of  slavery.  He 
visited  Portugal,  where  he  was  received  by 
the  Portuguese  Parliament.  He  also  visited 
London,  where  the  Anti-Slavery  Society 
held  a reception  in  his  honor.  In  January, 
1888,  he  went  to  Rome  to  obtain  the  Pope’s 
moral  concurse,  Leo  XIII.  showing  great 
sympathy  and  promising  to  write  an  En- 
cyclic to  the  Brazilian  bishops  favoring  the 
cause  of  abolition,  which  he  did,  but  the 
Encyclic  was  published  too  late,  owing  to 
the  rapidity  of  the  movement,  resulting  in 
complete  success  on  May  13,  1888.  The 
abolition  of  slavery  attached  Mr.  Nabuco 


to  the  Imperial  dynasty,  which  had  risked 
all  for  its  sake,  and  when,  on  November 
15,  1889,  the  Republic  was  proclaimed,  he 
kept  apart  from  the  general  movement  that 
led  both  the  old  monarchial  parties  to  ac- 
cept the  new  regime.  From  1889  to  1899,  as 
he  said,  he  wore  the  mourning  of  the  Mon- 
archy. In  that  decade  he  wrote  several 
books,  the  chief  of  which  was  his  father’s 
life,  a biography  which  is  a constitutional 
history  of  Dom  Pedro  II.’s  reign.  Since 
1895,  he  had,  however,  lost  hope  of  seeing 
monarchy  ever  restored  in  Brazil,  and  he 
realized  every  day  more  distinctly  that  the 
monarchial  agitation  would  only  be  profit- 
able to  the  extremist  Republican  section  and 
would  prevent  the  cooling  down  of  the  po- 
litical surface  to  a temperature  that  might 
render  it  inhabitable  for  all  opinions.  Many 
of  his  writings  since  1895  expressed  the 
wish  of  reconciling  himself  with  the  new 
destinies  of  the  country.  Such  was  his 
frame  of  mind  when  he  received,  in  1899, 
an  invitation  from  the  Republican  Govern- 
ment to  take  charge  of  the  cause  of  Brazil 
in  the  question  of  her  boundaries  with  Great 
Britain,  and  he  felt  it  was  a patriotic  duty 
to  accept.  Two  years  later,  in  1901,  loyally 
acknowledging  what  he  called  the  prescrip- 
tion of  history  he  returned  to  the  diplomatic 
service  as  Brazilian  Minister  to  England. 

His  work  on  the  Guiana  Boundary  com- 
prises seventeen  folio  volumes  in  French, 
of  which  a large  atlas,  all  presented 
within  a year  and  printed  \mder  the  gen- 
eral title:  “Front\ere8  du  Bresil  et  de  la 
Guyane  Anglaise;  Question  soumise  a VAr - 
bitrage  de  S.  M.  le  Roi  dTItalie.,,  As  soon 
as  the  King’s  award  was  given,  the  Brazilian 
Government  thought  of  sending  him  to 
the  United  States  with  the  rank  of  Am- 


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THE  BANKERS  MAGAZINE. 


bassador.  Mr.  Nabuco  is  the  author  of  the 
following  hooks:  “Camoes  e os  Lusiadasf * 
“O  A bolicionismo  ?’  “Balmacedaf  “Um 
Estadista  do  Imperior f'  his  father’s  life; 
“Minha  Formacaof * “Escriptos  e Discursos 
Litterarios.” 

Mr.  Nabuco  is  Honorary  Corresponding 
Member  of  the  Royal  Geographical  Society 
of  London;  Corresponding  Member  of  the 
London  Anti-Slavery  Society;  Columbia 
L.L.D.;  Member  of  the  Brazilian  Academy 
of  Letters,  and  of  several  other  societies. 
He  was  President  of  the  Third  Interna- 
tional American  Conference  at  Rio  de 
Janeiro  in  1906.  He  is  a Member  of  the 
Hague  Permanent  Court  of  Arbitration. 
He  published  in  Paris  Pensees  Detachers 
et  Souvenirs  (1906). 


MEXICAN  AID  TO  AGRICULTURE. 

GOVERNMENT  bill  has  been  intro- 
duced in  the  Mexican  Congress  pro- 
viding for  subsidies  to  the  extent  of 
$25,000,000  (Mexican  dollar  equals  49.8 
cents)  to  irrigation  enterprises  to  be  paid 
from  special  yearly  appropriations.  An- 
other Government  bill  is  for  a concession 
for  a new  bank  which  will  allow  farmers 
to  secure  long-term  mortgage  loans ; the 
total  amount  of  the  bonds  which  may  be 
issued  by  the  banking  company,  the  prin- 
cipal and  interest  of  which  will  be  guaran- 
teed by  the  Government,  is  not  to  exceed 
$50,000,000. 


COALING  STATION  FOR  MEXICO. 

AT  a cost  of  about  $400,000,  appro- 
priated bv  the  national  Congress  of 
Mexico,  the  republic  is  to  have  her 
first  important  coaling  station  at  the  port 
of  Manzanillo,  on  the  Pacific  Coast.  Both 
Houses  approved  the  contract,  and  Presi- 
dent Diaz  has  signed  the  act. 

The  station  will  be  the  first  important 
station  built  by  Mexico.  It  will  carry  a 
store  of  120,000  tons  of  coal.  Ships  of  ail 
nationalities  will  be  supplied  with  coal  on 
equal  terms.  The  importance  of  this  sta- 
tion is  manifested  by  the  fact  of  the  com- 
pletion of  the  railroad  to  Manzanillo  and 
other  important  railroad  buildings  of  the 
Pacific  slope,  and  means  a tremendous  im- 
petus to  the  growth  of  the  port. 


complete  the  link  between  the  Mexican 
border  and  the  Guatemalan  capital  will  be 
finished  within  the  next  fourteen  months. 

Full  concessions  for  constructing  this 
road  binding  the  concessionaries  to  have 
trains  running  over  the  road  giving  un- 
broken connection  between  Mexico  City  and 
Guatemala  City  within  fourteen  months 
have  been  granted  and  the  contracts  have 
been  let  for  construction.  The  concession 
for  this  link  of  the  road  has  been  granted 
to  two  Americans. 


GENERAL  NOTES. 

— Through  the  foresight  of  Senor  Liman- 
tour,  the  able  Minister  of  Finance,  Mexico 
is  to  have  a number  of  chambers  of  com- 
merce ( Camaras  Nacionales  de  Comercio) 
established  in  the  principal  cities.  They 
will  be  of  a semi-official  character,  and  in 
addition  to  their  work  m promoting  com- 
merce, will  have  jurisdiction  in  liquidating 
the  affairs  of  failed  concerns. 

— The  Republic  of  Columbia  has  estab- 
lished a bureau  of  information  at  15  White- 
hall street.  New  York  city,  where  all  in- 
formation and  other  particulars  concern- 
ing mining,  agriculture,  commercial  and 
industrial  pursuits,  railroads,  literature,  etc., 
of  the  country  may  be  obtained.  This 
bureau  is  a branch  of  the  Central  Colombian 
Office  of  Information  in  Bogota.  It  will 
be  provided  with  newspapers,  maps  and 
official  publications  of  general  interest  which 
may  serve  to  furnish  information  to  the 
many  recent  inquirers  in  the  United  States 
concerning  Colombia  and  the  opportunities 
existing  there  for  the  investment  of  foreign 
capital.  The  office  is  under  the  direction 
of  Dr.  Alirio  Diaz  Guerra. 

— The  Colombian  Government  has  made 
some  material  reductions  in  its  budget  for 
the  financial  year  ending  May,  1909.  The 
total  estimated  expenditures  for  the  com- 
ing year  are  $14,006,000,  a reduction  of  $3,- 
236,000  over  last  year.  As  the  estimated 
revenue  for  the  next  fiscal  year  is  $21,645,- 
000,  the  Government  expects  a surplus  of 
something  over  $7,000,000 

— Several  new  and  interesting  books  re- 
lating to  Latin  America  are  reviewed  in 
the  department  of  Book  Reviews,  in  another 
part  of  this  issue  of  the  Magazine. 


PAN-AMERICAN  RAILROAD. 

PRESIDENT  CABRERA  has  finally 
unlocked  the  long  closed  situation  re- 
garding the  construction  of  a Pan- 
American  railroad  through  Guatemala. 
The 'thirty  miles  of  railroad  now  lacking  to 


THE  postal  savings  bank  of  India  was 
established  in  1882,  in  which  year  the 
depositors  numbered  39,121  and  the 
deposits, amounted  to  $932,243.  In  1907  the 
depositors  numbered  1,190,220  and  the  de- 
posits amounted  to  $49,223,283. 


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ALL  BOORS  MENTIONED  IN  THESE  NOTICES  WILL  BE  SUPPLIED  AT  THE  PUBLISHERS 
LOWEST  RATES  BY  THE  BANKERS  PUBLISHING  COMPANY, 

90  WILLIAM  STREET.  NEW  YORK. 


Jay  Cooke,  Financier  of  the  Civil  War. 
By  Ellis  Paxon  Oberholtzer,  Ph.D.  Phil- 
adelphia: Geo.  W.  Jacobs  & Co.  (Two 
volumes;  price  $7.50.) 

There  are  few  names  connected  with  the 
history  of  this  country  that  possess  so  much 
of  interest  to  the  financial  student  as  that 
of  Jay  Cooke,  the  great  financier  of  the 
Civil  War.  But  besides  his  close  relations 
to  that  epoch,  Mr.  Cooke’s  career  is  in- 
structive for  the  display  of  remarkable  abil- 
ity, energy  and  cheerfulness  under  adverse 
conditions. 


JAY  COOKE. 

Like  Robert  Morris,  the  financier  of  the 
Revolution,  Jay  Cooke  lost  his  fortune, 
but,  unlike  Morris,  he  lived  to  recover  it. 

Dr.  Oberholtzer  has  given  us  more  than 
a biography.  He  has  furnished  a financial 
history  of  the  times  with  which  his  subject 
was  associated. 

The  stoiy  of  Jay  Cooke’s  life  reads  like 
a romance.  As  told  by  Dr.  Oberholtzer 
there  is  nothing  dry  or  tedious  about  it. 
On  the  contrary,  it  is  a delightful  book 


to  any  one  interested  in  the  history  of  great 
and  worthy  achievements. 

We  hope  at  some  future  time  to  treat 
of  this  work  in  a manner  more  commen- 
surate with  its  great  and  permanent  value 
to  American  financial  history.  It  is  a 
book  worth  having  and  keeping — a charm- 
ing biography,  a faithful  history,  and  an 
inspiration  pointing  to  energy  and  hope  as 
the  keys  to  success. 

+ 

The  American  Government:  Organization 
and  Officials;  with  the  Duties  and  Powers 
of  Federal  Office  Holders.  By  H.  C. 
Gauss;  with  a compilation  of  data  from 
original  sources.  New  York:  L.  R. 

Hamersly. 

This  is  a book  of  valuable  information, 
giving  in  detail  the  organization  of  the 
various  departments  of  the  Federal  Govern- 
ment, together  with  an  explanation  of  their 
functions. 

The  871  pages  of  the  book  are  filled  with 
instruction,  presented  in  an  interesting  way. 
Descriptions  of  the  Treasury  and  of  the 
banking  system  will  be  found  valuable  to 
bankers. 

+ 


Who’s  Who  in  America:  A Biographical 
Dictionary  of  Notable  Living  Men  and 
Women  of  the  United  States.  By  Alfred 
Nelson  Marquis.  (Price  $4.)  Chicago: 
A.  N.  Marquis  & Co. 

The  fifth  edition  of  this  work  (1908-1909) 
contains  2,304  pages  and  16,395  names  and 
sketches.  In  addition  to  the  personal 
sketches  contained  in  the  present  volume 
there  are  also  references  to  sketches  in  pre- 
vious editions  which  do  not  appear  in  this 
edition,  thus  making  available  for  easy 
reference  over  20,700  personal  sketches  of 
the  most  prominent  Americans  now  living, 
or  who  have  passed  away  since  the  first 
edition  was  issued  in  1899. 

The  Geographical  Index  to  this  edition 
(an  entirely  new  feature)  adds  greatly  to 
the  value  and  usefulness  of  the  book.  It 
groups  by  state,  city  and  postoffice  ad- 
dress all  names  in  the  volume,  making  it 


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easy  to  find  the  names  for  any  particular 
place  or  locality.  This  index  comprises  138 
closely  printed  pages. 

Who’s  Who  in  America  is  a highly  valu- 
able reference  book. 

+ 

The  South  Americans:  the  Story  of  the 
South  American  Republics,  Their  Charac- 
teristics, Progress  and  Tendencies;  with 
Special  Reference  to  Their  Commercial 
Relations  with  the  United  States.  By 
Albert  Hale,  A.B.,  M.D.  Indianapolis: 
The  Bobbs-Merrill  Co.  (Price  $2.50.) 

Dr.  Hale  is  well  qualified  for  the  work 
he  has  done  in  this  book,  and  he  gives  us 
a work  of  value  to  the  prospective  traveler 
and  the  student,  and  of  especial  usefulness 
to  those  who  seek  to  extend  their  trade  re- 
lations with  Latin  America.  One  of  the 
things  the  business  man  of  the  United 
States  must  learn  if  he  is  ever  to  get  a 
fair  share  of  Latin  American  trade, 
is  that  he  cannot  deal  with  these  people 
as  he  can  with  his  home  customers. 

Dr.  Hale’s  book  will  straighten  out  many 
of  these  points,  and  will  no  doubt  prove 
enlightening  to  many  who  have  unsuccess- 
fully sought  to  build  up  business  connections 
with  South  America. 

But  the  volume  is  more  than  a guide  for 
travelers  and  business  men.  It  contains 
much  of  history  and  description,  and  a 
number  of  good  illustrations.  All  who  de- 
sire to  get  better  acquainted  with  the  South 
Americans  should  read  Dr.  Hale’s  book. 

+ 

Minino  Investments  and  How  to  Judge 
Them.  By  Francis  C.  Nichols,  Ph.D. 
New  York:  The  Moody  Corporation. 

(Price,  postpaid,  $1.62.) 

“Mining  Investments  and  How  to  Judge 
Them”  is  an  attractive  handbook  of  about 
240  pages,  covering  in  a most  entertaining 
as  well  as  authoritative  way,  the  whole  sub- 
ject of  mining  investments  and  the  values 
of  mining  stocks.  The  author  is  a man  of 
wide  experience  and  sound  judgment  on 
this  subject;  he  is  a mining  engineer  of 
known  ability;  he  has  visited  all  the  leading 
mining  camps  of  the  world,  and  has  of  re- 
cent years  made  it  his  business  to  ascer- 
tain the  values  of  mines  and  mining  se- 
curities for  investors.  The  book  contains 
twenty-one  chapters,  covering  such  subjects 
as  the  organization,  financial  and  physical 
development  of  mining  properties;  the  rela- 
tion of  mining  stocks  to  the  properties  back 
of  them ; reasons  why  raining  companies 
fail,  and  also  why  they  sometimes  succeed. 
He  also  states  clearly  the  conditions  under 
which  mining  propositions  can  usually  be 
made  a success  as  well  as  the  conditions 
under  which  they  are  almost  certain  to 


fail.  One  of  the  ablest  chapters  in  the 
book  is  that  on  the  subject  of  investments 
in  dividend  paying  mining  stocks. 

In  addition  to  the  subjects  enumerated 
above,  the  author  has  supplied  several  chap- 
ters which  describe  the  mining  camps  of 
the  world  and  those  of  the  United  States, 
all  of  which  are  both  entertaining  and  in- 
structive. 

+ 

South  America  on  the  Eve  of  Emanci- 
pation: the  Southern  Spanish  Colonies  in 
the  Last  Half-Century  of  Their  De- 
pendence. By  Bernard  Moses,  Ph-D., 
LL.D.  New  York:  G.  P.  Putnam’s  Sons. 

It  is  the  aim  of  the  author  to  present 
certain  conspicuous  events,  institutions,  and 
phases  of  life,  that  may  illustrate  the  state 
of  the  Southern  Spanish  Colonies  on  the 
eve  of  the  revolution  which  gave  them  in- 
dependence. 

The  history  of  this  development  is  care- 
fully traced  through  its  various  steps,  and 
the  story  told  is  both  instructive  and  in- 
teresting. No  one  can  accurately  measure 
the  great  progress  and  achievements  of  the 
Spanish-Amriean  countries  without  some 
standard  of  comparison  with  past  condi- 
tions. Such  a standard  is  afforded  by  this 
book. 

+ 

The  Establishment  of  Spanish  Rule  in 
America — An  Introduction  to  the  His- 
tory and  Politics  of  Spanish  America. 
By  Bernard  Moses,  Pli.D.  New  York: 
G.  P.  Putnam’s  Sons. 

This  book  has  been  written  to  present 
the  main  events  connected  with  the  estab- 
lishment of  Spanish  rule  in  America,  and 
to  describe  briefly  the  more  important  fea- 
tures of  Spain’s  colonial  organization  and 
policy.  It  is  not  designed  to  embrace  the 
history  of  the  Spanish  colonies,  or  to  fur- 
nish a rigid  analysis  of  their  constitutional 
law.  It  aims,*,  by  the  use  of  certain  his- 
torical facts,  to  make  clear  to  ordinary 
readers  and  to  students  in  high  schools  and 
colleges  the  origin  and  character  of  the 
political  and  economic  institutions  con- 
structed for  the  government  of  Spanish 
America.  It  aims,  moreover,  to  suggest 
that  American  history  is  not  all  told  in  the 
history  of  the  United  States,  and  by  mak- 
ing accessible  in  a concise  form  a general 
account  of  the  Spanish  colonies  in  their 
earlier  decades,  to  offer  an  introduction 
to  the  neglected  half  of  American  history. 

There  are  few  more  significant  historical 
developments  than  the  rise  and  decline  of 
Spain’s  colonial  power.  The  policies  which 
were  employed  in  dealing  with  the  Spanish 
colonies  may  here  be  studied  with  interest 
and  profit. 


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BOOK  REVIEWS. 


Ill 


The  Con  tine  kt  of  Opportunity:  the  South 
American  Republics,  Their  History,  Their 
Resources,  Their  Outlook.  Together  with 
a Traveler’s  Impressions  of  Present-Day 
Conditions.  By  Francis  E.  Clark,  D.D., 
LL.D.  New  York:  Fleming  H.  Revell 
Co.  (Price  $1.50.) 

By  the  construction  of  the  Panama  Canal, 
attention  has  been  turned  very  sharply  in 
the  direction  of  Latin  America,  and  any 
book  describing  the  resources  of  these  coun- 
tries is  timely  and  welcome. 

Dr.  Clark  in  this  volume  shows  himself 
to  be  a good  observer,  and  he  has  made  a 
most  valuable  contribution  to  the  litera- 
ture relating  to  Latin  America.  The  de- 
scription given  of  the  various  countries 
and  their  resources  will  be  found  of  prac- 
tical worth  to  those  who  have  or  who  con- 
template having  business  relations  with 
these  countries,  while  the  historical,  roman- 
tic and  scenic  features  of  “The.  Continent 
of  Opportunity”  are  dealt  with  in  a way 
that  greatly  enhances  the  book’s  interest. 

+ 

The  Investors’  Primer.  By  John  Moody. 
New  York:  The  Moody  Corporation. 

(Price,  postpaid,  $1.62.) 

“The  Investors’  Primer”  is  the  fifth  vol- 
ume in  the  set  published  by  The  Moody 
Corporation  under  the  general  head  of  “The 
Investors’  Library.”  It  is  an  attractive 
volume  and  because  of  the  field  which  it 
covers  is  really  of  great  practical  value 
to  the  investor.  Following  an  interesting 
introductory  chapter  which  consists  of  a 
general  outline  or  description  of  the  in- 
vestment field,  the  book  contains  alphabet- 
ically arranged  definitions  of  all  the  various 
terms  and  phrases  used  in  the  financial  and 
investment  markets,  and  a full  description 
of  the  entire  mechanism  and  machinery  of 
investing.  All  the  terms  and  phrases,  many 
of  which  are  not  clearly  understood  by  some 
brokers  themselves,  are  here  clearly  and 
simply  defined.  In  addition  to  this,  the 
book  embraces  a section  devoted  to  de- 
scriptions of  the  various  issues  of  preferred 
and  guaranteed  stocks  which  are  generally 
classed  among  high  grade  investment  issues. 

+ 

How  to  Invest  Money.  By  George  Garr 
Henry.  (Price,  75  cents.)  New  York* 
Funk  & Wagnalls  Company. 

Mr.  Henry  is  vice-president  of  the  Guar- 
anty Trust  Company  of  New  York,  and 
writes  from  the  standpoint  of  wide  ex- 
perience in  handling  securities.  He  clearly 
analyzes  the  principles  of  investments,  and 
affords  the  investor  a working  knowledge  of 
the  various  classes  of  securities — stocks, 


bonds,  mortgages,  etc. — which  are  available, 
and  their  relative  adaptability  to  different 
requirements. 

The  growth  of  the  literature  of  invest- 
ment is  a hopeful  sign.  It  shows  that  the 
number  of  investors  is  increasing,  and  that 
they  may,  if  they  choose,  have  the  assistance 
of  expert  counsel  before  making  a choice 
of  securities.  Such  advice  is  highly  valu- 
able, not  only  to  those  who  are  just  enter- 
ing the  investment  field,  but  to  the  banker 
who  is  accustomed  to  buying  securities.  For 
conditions  are  changing,  and  the  best  re- 
sults are  to  be  attained  only  by  acting  in 
the  light  of  the  latest  and  best  informa- 
tion. 

The  underlying  principles  governing  in- 
vestments are  clearly  defined,  and  the 
adaptability  of  various  classes  of  securities 
to  different  needs  clearly  shown.  It  is  one 
of  the  most  trustworthy  guides  for  the  in- 
vestor that  we  have  yet  seen. 


+ 


Commentary  on  the  Science  of  Organi- 
zation and  Business  Development.  By 
Robert  J.  Frank,  LL.B.  of  the  Chicago 
Bar.  Chicago:  Chicago  Commercial  Pub- 
lishing Co.  (Price,  vellum,  $2.75;  sheep, 
$3.) 

The  principles,  laws  and  suggestions  con- 
tained in  this  book  are  such  as  would,  if 
followed,  tend  to  promote  safe  and  efficient 
methods  of  corporate  formation  and  con- 
trol. Among  the  subjects  considered  are: 
“Business  Principles  and  Ethics;”  “Busi- 
ness Building;”  “Corporate  Financing;” 
“Corporate  Management;”  “Reorganization 
and  Consolidation  of  Enterprises ;”  and 
“Promotion  of  Enterprises.” 

Much  clear  and  non-tecbnical  information 
is  given  about  financing,  organizing  and 
promoting  business  affairs.  This  is  an  im- 
portant addition  to  the  literature  of  busi- 
ness. 

+ 

Fifty  Years  in  Wall  Street.  By  Henry 
Clews,  LL.D.  New  York:  Irving  Pub- 
lishing Company.  (Price,  $3.) 

Mr.  Clews  is  one  of  the  veterans  of  the 
Street.  According  to  the  Stock  Exchange 
Directory  issued  July  1,  1907,  there  were 
then  living  but  seven  men  whose  member- 
ship of  the  Stock  Exchange  antedated  his. 

The  volume  contains  over  one . thousand 
pages,  full  of  history,  anecdote,  philosophy 
and  sound  business  advice.  There  are 
sketches  of  all  the  giants — Commodore  Van- 
derbilt, Drew,  Loge,  Jay  Gould,  etc.,  etc., 
and  not  the  least  delightful  part  of  the  book 
is  the  chapter  devoted  to  Wm.  R.  Travers, 
the  famous  stuttering  wit. 

Mr.  Clews  has  been  in  a position  to  ob- 


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serve  the  great  changes  taking  place  in  our 
business  and  political  life  during  the  past 
half-century  and  has  himself  had  a notable 
part  in  the  shaping  of  events.  His  own 
career  has  been  remarkably  successful,  and 
he  points  out  in  his  book  the  basis  upon 
which  success  must  rest  in  Wall  Street  as 
elsewhere. 

The  concluding  part  of  the  volume  con- 
tains a number  of  addresses,  recently  de- 
livered by  Mr.  Clews,  treating  of  present- 
day  problems.  % 

“Fifty  Years  in  Wall  Street”  is  a most 
entertaining  and  instructive  book. 

+ 

The  Manual  of  Statistics.  New  York: 

The  Manual  of  Statistics  Co.  (Price  $5.) 

The  Manual  of  Statistics  for  1908  has 
just  appeared,  being  the  thirtieth  annual 
issue  of  that  standard  reference  publica- 
tion. As  usual,  it  contains  in  concise  and 
complete  form  the  information  regarding 
railroad  and  industrial  corporations  of  the 
United  States  and  Canada,  government  se- 
curities, mining  stocks  and  the  grain  and 
cotton  statistics  which  are  required  by  in- 
vestors, speculators  and  stock  market  in- 
terests. The  1,080  pages  of  the  compact  and 
handsome  volume  present  a great  fund  of 
data  and  statistics  of  a practical  character 
on  such  subjects,  its  utility  being  enhanced 
by  an  arrangement  rendering  reference  to 
the  contents  of  any  section  easy  and  satis- 
factory. The  present  edition  also  devotes 
much  attention  to  the  newer  industrial  and 
mining  companies  whose  securities  have  be- 
come such  a feature  in  the  stock  markets 
of  the  United  States,  and  furthermore  gives 
the  many  changes  in  dividend  payments 
which  have  occurred  down  to  the  date  of  its 
issue.  It  gives  throughout  evidence  of  ac- 
curacy and  careful  compilation,  and  is 
brought  down  to  date  in  its  descriptive 
and  statistical  details,  making  the  volume 
one  which  investors  and  all  who  are  inter- 
ested in  the  flnancial  and  other  markets  of 
the  country  can  use  to  good  advantage. 

+ 

Why  Worhy?  By  George  Lincoln  Walton, 

M.D.  Philadelphia:  J.  B.  Lippincott  Co. 

“The  legs  of  the  stork  are  long,  the  legs 
of  the  duck  are  short;  you  cannot  make 
the  legs  of  the  stork  short,  neither  can  you 
make  the  legs  of  the  duck  long.  Why 
worry?” — Chwang  Tsze. 

This  is  no  attempt  to  exculpate  the  con- 
duct of  the  man  who  goes  to  enjoy  a game 
of  baseball,  leaving  his  family  to  starve, 
nor  does  it  seek  to  provide  a remedy  for 
the  supreme  griefs  of  life.  What  Doctor 
Walton  aims  at  is  to  show  us  how  we  may 
rid  ourselves  of  many  of  the  petty  worries 
that  beset  us. 


The  counsel  given  is  good  and  ought  to 
be  helpful  to  all  those  who  are  inclined  to 
have  undue  solicitude  about  more  or  less 
trivial  matters. 

Incidentally  we  may  express  the  hope 
that  a future  edition  of  “Why  Worry” 
will  correct  errors  in  spelling  (“tranquility,” 
“dissention”),  and  be  more  accurate  in  quot- 
ing Whittier,  and  the  real  or  alleged  dying 
words  of  Lawrence,  about  giving  up  the 
ship.  But  perhaps  these  errors  are  not 
worth  worrying  over. 

The  book  contains  much  sound  sense, 
and  its  suggestions  may  well  be  heeded  by 
men  engaged  in  business  activity. 

+ 

Thomas  Gibson’s  Market  Letters  for  1907. 
New  York:  Thomas  Gibson.  (Price  $1.) 

These  letters  contain  many  facts  in  re- 
gard to  prices,  crops,  railway  earnings, 
etc.,  together  with  a review  of  conditions 
at  the  time  the  letters  were  issued.  Some 
of  the  prophecies  were  not  fulfilled,  but  that 
was  doubtless  due  to  the  perversity  of  the 
course  of  events  in  not  paying  proper  at- 
tention to  the  predictions. 

+ 

Who’s  Who  in  New  York  City  and  State. 
Edited  by  John  W.  Leonard.  New  Yorks 
L.  R.  Hamersly  & Co. 

Contains  biographies  of  New  Yorkers  wdio 
are  leaders  and  representatives  in  various 
departments  of  worthy  human  achievement, 
including  sketches  of  the  army  and  navy 
officers  born  in  or  appointed  from  New 
York  and  now  serving,  the  Congressmen 
from  the  state,  state  senators  and  judges, 
and  ambassadors,  ministers  and  consuls  ap- 
pointed from  the  state. 

In  this,  the  third  edition,  the  sketches 
have  been  revised,  condensed  or  extended. 

+ 

BOOKS  RECEIVED. 

The  Economic  Bulletin.  Published  quar- 
terly by  the  American  Economic  Asso- 
ciation. 

A somewhat  extensive  notice  of  the  scope 
of  this  new  publication  was  given  in  the 
May  number  of  the  Magazine.  It  is  devoted 
chiefly  to  a review  of  economic  works  and 
to  the  indexing  of  book  titles  and  articles 
on  subjects  of  interest  to  economists. 

+ 

Proceedings  of  the  National  Conference 
on  Trusts  and  Combinations,  under  the 
auspices  of  the  National  Civic  Federa- 
tion. New  York:  National  Civic  Federa- 
tion. 


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MODERN  FINANCIAL  INSTITUTIONS 
AND  THEIR  EQUIPMENT 


HOME  OF  THE  OHIO  SAVINGS  BANK  AND  TRUST 
COMPANY,  TOLEDO,  OHIO. 


THERE  is  perhaps  no  finer  specimen  of 
bank  architecture  to  be  found  any- 
where between  New  York  and  Chi- 
cago than  that  which  is  shown  in  the  mag- 
nificent building  erected  by  the  Ohio  Sav- 
ings Bank  and  Trust  Company  of  Toledo, 
Ohio. 

The  artist  and  architect  have  here  co- 
laborated  with  those  skilled  in  the  building 
trades  in  the  making  of  an  institution  that 


the  city  of  Toledo  for  years  to  come. 
Its  floors  of  modern  offices  rise  high  above 
the  surrounding  buildings,  assuring  ex- 
cellent light  and  ventilation  and  making 
them  very  pleasant  indeed. 

Description  of  Interior. 

The  bank’s  quarters  are  to  be  found  on 
the  first  floor  and  in  the  basement,  hand- 
somely finished  in  marbles,  costly  woods 


Stairway  from  Bank  Lobby  to  Safe  Deposit  Department. 


must  appeal  to  the  aesthetic  sense  of 
everyone  who  comes  within  its  doors. 
Simple,  but  massive,  without  any  attempt 
at  showiness,  this  structure  will  be  a mon- 
ument to  its  builders  and  an  ornament  to 

8 


and  expensive  tapestries  from  many  coun- 
tries. On  three  sides  of  the  spacious  lobby 
are  the  tellers  windows  and  counters,  sep- 
arated from  the  public  by  a beautiful  grill 
of  cast  bronze  and  plate  glass. 


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Bank  Lobby . 


MODERN  FINANCIAL  INSTITUTIONS. 


115 


The  lower  part  of  these  counters  is  of 
white  marble  as  is  also  the  floor  of  the 
lobby  and  the  carved  writing  desk  in  the 
center  of  the  room.  Great  square  columns 
of  American  Pavonezzata,  a high  grade  of 
marble  quarried  in  Vermont,  support  the 
arched  ceiling,  which  is  of  metal  over- 
laid with  goldleaf. 

The  simple  lines  of  the  iris  and  a mono- 
gram made  of  the  word  “Ohio”  have  been 


the  entire  bank  is  finished  in  India  mahog- 
any with  loose  furniture  to  correspond. 

The  Ohio  Savings  Bank  & Trust  Co. 
makes  a specialty  of  savings  a .-counts — of 
looking  after  the  welfare  of  the  small  de- 
positor. This  department  is  to  the  left  as 
one  enters  the  lobby.  The  card  index  sys- 
tem is  used  and  the  bank  will  be  able  to 
care  for  35,009  depositors.  There  are  five 
window's  for  depositors,  running  the  length 


Partial  View  of  Officers'  Quarters. 


used  as  decorative  features  here  and 
throughout  the  entire  building. 

To  the  right  as  one  enters  the  bank  are 
located  the  offices  of  the  cashier  and  the 
president,  and  further  back  is  the  presi- 
dent’s private  office  and  the  directors’  meet- 
ing room. 

Of  these  the  directors’  room  is  the  most 
elegantly  finished.  Carved  mahogany  wain- 
scoting six  feet  high  extends  around  the 
room,  w-hile  the  W'aus  are  covered  with  a 
high  grade  of  English  tapestry.  A special- 
ly designed  rug  covers  the  floor  and  the 
furniture  is  of  massive  mahogany  decorated 
with  the  carved  iris  and  Ohio  monogram  in 
green  ebony  and  satin  wood. 

With  the  exception  of  the  women’s  meet- 
ing and  consultation  rooms  in  the  basement. 


of  the  alphabet,  and  one  window  for  the 
registering  of  new  depositors. 

The  Vaults. 


'Ihe  three  massive  vaults  in  the  building 
w'ere  designed  by  and  manufactured  under 
the  personal  supervision  of  C.  W.  Hains  of 
Columbus.  Mr.  Hains  is  an  expert  in  the 
matter  of  bank  vaults  and  designed  and  in- 
stalled the  big  treasury  vault  at  Columbus, 
Ohio. 

To  enter  the  cash  vault  one  must  pass 
through  tw'o  doors,  the  outer  one  weighing 
about  10,000  pounds  and  being  of  six-inch 
steel,  while  the  inner  door  is  of  two-inch 
steel.  The  inner  door  is  a straight  com- 
bination affair  w'hile  the  outer  door  is 
equipped  with  a quadruple  time  lock. 


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Entrance  to  Safe  Deposit  Department. 


Ladies'  Reception  Room  and  Consultation  Room. 

OHIO  SAVINGS  BANK  AND  TRUST  COMPANY,  TOLEDO,  OHIO. 


116 


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MODERN  FINANCIAL  INSTITUTIONS. 


117 


Backing  up  the  steel  walls  of  the  cash 
vault  is  a thirteen-inch  concrete  wall  re- 
inforced with  twisted  steel  bars. 

The  book  vault  is  located  by  the  side  of 
the  cash  vault  and  is  constructed  along  fire 
proof  lines  rather  than  burglar  proof. 

The  safety  deposit  department  of  the 
bank  is  located  in  the  basement.  This  de- 
partment alone  covers  3,000  square  feet  of 
floor  space  and  is  composed  of  the  public 
lobby,  the  big  safety  deposit  vault,  the 
women’s  meeting  and  consultation  rooms, 
the  men’s  meeting  and  consultation  rooms. 


custodian  are  required  to  work  the  locks. 
The  coupon  rooms  are  for  the  use  of  cus- 
tomers who  wish  to  look  over  their  papers 
at  the  bank.  The  rooms  are  strictly  private 
and  equipped  with  lights,  tables  and  chairs. 

Business  Meeting  Rooms. 

The  meeting  and  consultation  rooms  are 
for  the  use  of  parties  who  have  papers  at 
the  bank  and  who  wish  to  hold  meetings  of 
a business  nature.  The  corporation  room 
is  for  the  use  of  corporations  for  business 
meetings. 


Paying  Tellers  Window. 


fourteen  coupon  rooms  and  the  corporation 
rooms. 

The  safety  deposit  vault  is  50x9  feet  and 
now  contains  1724  boxes  with  space  in  the 
vault  for  the  storage  of  trunks  and  large 
boxes  of  valuables. 

Two  keys  and  likewise  two  persons  are 
required  to  enter  any  of  the  safety  boxes 
after  they  have  once  been  rented.  If  a 
customer  desires  to  look  over  any  papers 
he  may  have  in  the  vault  he  calls  on  the 
custodian  who  has  a desk  outside  the  vault. 
Both  the  master  key  in  the  possession  of 
the  customer  and  another  key  with  the 


The  bank  also  conducts  a real  estate 
trust  and  bond  business.  This  office  is 
located  to  the  left  as  the  main  lobby  is  en- 
tered. O.  K.  Hutchinson,  late  of  the  well 
known  bond  house  of  Fisk  & Robinson,  is 
in  charge  of  this  department. 

The  Ohio  Savings  Bank  and  Trust  Com- 
pany has  become  popular  with  the  wage- 
earners  of  Toledo  and  its  rapid  growth  has 
been  marvelous. 

The  officers  of  the  institution  at  present 
are  as  follows: 

David  Robison,  Jr.,  chairman  of  board; 
Jas.  J.  Robison,  president;  Edward  Ford, 


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118 


THE  BANKERS  MAGAZINE. 


Individual  Bookkeepers  Desk,  Paying  Tellers  Cage  and  Receiving  Tellers  Cage. 


vice-president;  Edward  H.  Cady,  cashier; 
C.  E.  Kirschner,  assistant  cashier;  E.  A. 
Williams,  Jr.,  trust  officer. 

Directors:  D.  Robison,  Jr.,  J.  Kent. 

Hamilton,  C.  M.  Spitzer,  D.  C.  Shaw,  M. 


B.  Daly,  Thos.  H.  Tracy,  W.  F.  Robison, 
Edward  Ford,  W.  H.  Bruns,  E.  W.  New- 
ton, Geo.  S.  Mills,  C.  M.  Feilbach,  Thos. 
J.  Watson,  Jas.  J.  Robison,  Edward  H. 
Cady. 


NEW  HOME  OF  A MASSACHUSETTS  TRUST  COM- 
PANY. 


SPRINGFIELD,  Mass.,  has  taken  another 
stride  toward  metropolitan  conditions 
by  adding  to  its  roster  of  fine  public 
buildings  the  magnificent  structure  opened 
by  the  Union  Trust  Company  on  May  2. 

In  rare  effectiveness  of  design,  complete- 
ness of  its  most  modern  equipment,  and  the 
convenience  and  elegance  of  its  facilities 
for  the  banking  and  business  public,  this 
banking  house  will  compare  favorably  with 
any  other  throughout  New  England. 

Owing  to  the  massive  and  unique  design 
of  the  front  of  the  building,  towering  some 
70  feet  in  the  air  with  its  great  arch  and 
ornamental  carvings,  the  building  does  not 
at  first  sight  furnish  a true  appreciation 
of  its  real  size  and  of  the  amount  of  room 
which  it  provides.  It  really  covers  a space 
53  by  142  feet  and  it  is  so  designed  that 


there  is  not  a dark  room  in  it.  The  front 
arch,  which  is  21  feet  wide  and  44  feet 
high,  provides  not  only  for  the  great  ma- 
hogany outer  and  inner  doors  but  above 
them  a great  expanse  of  ornamental  window 
space  which  floods  the  interior  with  light 
from  the  west.  Above  the  arch  on  either 
side  are  carved  female  figures,  recumbent, 
the  work  of  John  Evans  of  Boston,  and 
over  these  the  work  is  carried  up  with 
carved  stone  and  ornamental  cornice,  so 
that  the  whole  is  an  artistically  conceived 
and  perfectly  executed  work  of  art  in  white 
sandstone. 

Main  Banking  Room. 

Undoubtedly  the  highest  achievement  in 
wood  work  is  plain  massive  mahogany  and 
so  far  as  the  wood  work  of  the  interior 


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MODERN  FINANCIAL  INSTITUTIONS. 


119 


goes,  there  is  nothing  else;  and  yet  the  mas- 
siveness of  the  mahogany  is  not  so  con- 
spicuous as  the  obtrusive  massiveness  of 
the  marble  and  more  than  this  the  vastness 
of  the  whole  interior.  This  interior  seems 
at  first  sight  to  be  opened  up  into  a vast 


marble  wainscoating  and  on  lightly  tinted 
walls  is  reflected  and  diffused  everywhere. 
This  vast  room  which  is  over  30  feet  high 
practically  runs  the  whole  length  of  the 
building,  or  140  feet.  The  smooth  walls 
have  at  intervals  plain  pilasters  with  corin- 


The  New  Banking  House  of  the  Union  Trust  Company,  Springfield,  Mass. 


banking  office  flooded  with  light  from  the 
long  circular  skylight  in  the  roof  as  one 
looks  down  it,  it  is  a vision  of  marble,  verde 
green  grill  work  with  the  great  steel  cov- 
ered vault  rising  like  a building  by  itself 
in  the  rear. 

There  are  no  dark  corners;  the  light  fall- 
ing on  white  marble  floors  and  on  white 


thian  capitals,  from  which  heavy  plastered 
beams  run  over  the  ceiling  to  the  arched 
skylight. 

On  the  marble  floor  of  the  central  cor- 
ridor are  but  two  pieces  of  furniture  and 
yet  they  are  perhaps  the  choicest,  being 
designed  especially  for  the  bank.  They  are 
unique  works  of  art  in  mahogany  with 


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Safe  Deposit  Vault. 

UNION  TRUST.  COMPANV,  SPRINGFIELD.  MASS. 


120 


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MODERN  FINANCIAL  INSTITUTIONS. 


121 


beautifully  finished  tops  and  in  the  center 
of  each  are  glass  frames  for  checks,  etc.,  for 
the  customers  of  the  bank. 

Clerk's  Quarters. 

Above  the  counters  stretches  the  heavy 
grill  work  of  verde  green  metal  with  eleven 
wickets,  four  for  the  paying  tellers  on  one 
side,  four  for  receiving  tellers  on  the  other, 
and  other  wickets  for  discounts,  collections, 
foreign  exchange  and  so  forth.  Behind 
each  wicket  is  a space  enclosed  by  the  metal 
grill  work  so  that  each  clerk  has  a roomy 
enclosure  of  his  own,  provided  with  the 


Mezzanine  Gallery. 

Running  across  the  front  of  the  inside  of 
the  main  banking  room  is  a mezzanine  gal- 
lery which  is  reached  from  the  stairs  on  the 
southwest  corner  or  by  the  elevator  there 
and  from  which  gallery  one  may  look  down 
on  the  main  floor  of  the  bank.  This  gallery 
is  lighted  from  the  large  windows  over  the 
front  doors.  On  the  northwest  corner  oc- 
cupying space  corresponding  to  the  stairways 
and  elevator  on  the  other  side  is  a ladies* 
waiting  room.  Thus  the  facilities  for  the 
ladies  do  not  end  with  the  elegant  business 
room  on  the  main  floor.  They  have  only  to 


Directors’  Room,  Union  Trust  Company. 


latest  things  in  cabinets,  all  in  mahogany. 
In  one  of  these  is  set  under  the  counter 
a small  steel  safe  into  which  books  or  papers 
which  happen  to  be  left  out  after  the  great 
vault  is  closed  may  be  placed.  Behind  these 
enclosures  on  either  side  and  next  to  the 
walls  is  a line  of  mahogany  desks  for  clerks, 
and  stenographers  with  various  cabinets  and 
other  furnishings  for  a complete  banking 
house,  all  new  and  all  in  mahogany  and  all 
of  the  same  plain  and  choice  design. 

There  is  a special  wicket  for  the  ladies. 
They  do  not  have  to  leave  their  elegant 
quarters.  On  the  other  side  are  the  rooms 
of  the  officers  of  the  bank  and  these  are 
shut  off  by  heavy  mahogany  doors  from  the 
main  banking  room  and  have  a plain  ma- 
hogany wainscoating  as  high  as  the  doors, 
while  the  furniture  is  all  mahogany.  Here 
as  elsewhere  heavy  rugs  cover  the  marble 
floors. 


get  into  the  elevator  and  cross  the  mezzanine 
gallery  to  enter  a large  parlor,  lighted  by 
two  high  windows  on  the  north,  dressed 
with  heavy  velvet  hangings  with  a gilt 
fringed  edge.  On  the  floor  is  a beautiful 
rug,  a mahogany  table  of  fine  design  and 
dainty  chairs  and  a sofa.  Off  from  it,  also 
with  an  outside  window,  is  a toilet  room. 

Rooms  on  Third  Floor. 

Two  long  galleries  running  along  on  either 
side  of  the  great  arched  skylight  which 
•admits  light  to  the  main  room,  constitute 
the  third  floor. 

On  the  north  side  is  a series  of  rooms 
which  is  unique  in  the  banking  tacilities  of 
the  city.  First  there  is  a large-  room  with  a 
long  mahogany  table  in  the  center,  and  the 
floor,  which  on  this  story  is  of  oak,  is 
covered  with  an  immense  rug.  This  is  twice 
the  size  of  the  directors*  rooms  in  most 


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122 


THE  BANKERS  MAGAZINE. 


banks  but  it  is  not  the  directors*  room.  It 
is  a room  for  the  public,  which  any  one  can 
have  for  a meeting  of  business  associates, 
directors  of  corporations  or  anything  else. 
But  this  is  only  one  of  a series,  the  others 
being  smaller.  There  are  four  others,  each 
with  its  mahogany  table  in  the  center,  each 
with  its  rug,  each  with  its  outside  window. 
These  are  for  the  public  also. 

The  directors’  room  on  the  rear  may  be 
entered  from  either  gallery  on  this  floor 
and  is  tastefully  furnished  with  rugs,  ma- 
hogany table  and  chairs  and  marble  fire- 
place. 

The  Bank  Vault. 

One  of  the  most  notable  features  of  the 
Union  Trust  Company’s  plant  is  the  enor- 
mous vault  which  was  built  for  them  by  the 
Remington  and  Sherman  Co.  of  New  York, 
at  a cost  of  $50,000. 

It  measures  on  the  outside  27x^3  feet  and 
rises  12  feet  above  the  main  floor. 

The  walls,  which  are  about  two  feet  in 
thickness,  are  of  steel  plates  and  concrete. 
They  are  entered  by  two  sets  of  doors  at 
the  front  and  two  at  the  rear  and  are  en- 
circled by  wires  of  the  burglar  alarm  sys- 
tem. 

Inside  the  vault  there  are  the  safe  deposit 
boxes  for  renting  to  customers,  also  com- 
partments for  the  bank’s  cash  and  collat- 
eral. 


The  official  board  of  the  bank  is  a very 
strong  one.  It  combines  men  of  large  busi- 
ness experience  and  wide  connections,  and 
some  all  around  business  and  professional 
men. 

Charles  W.  Bosworth  is  president;  J.  W. 
Kirkham,  vice-president;  William  E.  Gil- 
bert, vice-president  and  treasurer;  Charles 
H.  Churchill,  secretary;  William  H.  Has- 
kins, assistant  treasurer. 

Officers  and  Staff. 

The  staff  of  the  Union  Trust  Company, 
when  they  opened  up  their  new  building 
May  2,  was  made  up  as  follows:  Paying  de- 
partment, Frank  S.  Burt,  assisted  by 
Ralph  Rathbun;  receiving  department. 
Nelson  E.  Elmer,  F.  W.  Ferry,  Douglas 
Wesson;  discount  department,  Fred  L. 
Safford,  assisted  by  Benjamin  L.  Bragg; 
foreign  exchange  and  collection  depart- 
ment, Benjamin  L.  Bragg,  Jr.;  bookkeep- 
ing department,  Raymond  Burt,  Harris 
Caldwell,  W.  M.  Willard,  Frank  Hughes, 
Miss  Hitchcock;  check  teller,  Edwin  Rice 
and  Frank  Crowther,  assistant;  sten- 
ographers, Miss  Leona  S.  Knaggs  and  Miss 
Naomi  Reed;  clerk,  Harry  Thomas;  tele- 
phone operator  Miss  Minerva  Demond. 
Dustin  A.  Folsom  will  be  the  manager  in 
charge  of  the  post  office  branch,  assisted 
by  H.  R.  Bridgman  as  teller. 


NEW  CASHIER  UNION  NATIONAL  BANK  OF  PHILADELPHIA. 


ON  June  6,  Louis  N.  Spielberger,  a 
popular  bank-man  of  Philadelphia, 
was  elected  cashier  of  the  Union 
National  Bank  of  that  city,  when  the  Union 
National  purchased  the  assets  and  business 
of  the  Consolidation  National  Bank. 

Mr.  Spielberger  has  spent  his  entire  life 
in  the  Quaker  City  and  up  to  the  present 
time  has  been  connected  with  several  banks 
there  in  various  capacities. 

After  a thorough  education  in  the  com- 
mon schools  and  a course  in  a business  col- 
lege he  entered  the  employ  of  the  Union 
National  Bank,  February  27,  1882. 

On  October  1,  1886,  shortly  after  the 
organization  of  the  Independence  National 
Bank  by  Peter  A.  Keller,  formerly  cashier 
of  the  Union  National,  Mr.  Spielberger 


entered  its  employ  as  a bookkeeper,  and  on 
August  27,  1900,  was  elected  assistant  to 
the  cashier,  with  authority  to  perform  all 
the  duties  of  the  cashier  until  October  1, 
1900,  when  elected  assistant-cashier. 

On  May  6,  1901,  he  entered  the  Girard 
National  Bank,  when  the  Independence 
National  was  merged  into  the  former  and 
was  manager  of  the  collateral  loan  depart- 
ment until  June  2,  1902,  at  which  time  he 
became  assistant  cashier  of  the  Consolida- 
tion National  Bank,  and  later  on  January 
16,  1903,  its  cashier. 

Upon  the  absorption  of  the  Consolidation 
National  by  the  Union  National,  already 
mentioned,  Mr.  Spielberger  returned  to  the 
bank  originally  entered,  after  an  absence  of 
over  twenty-one  years. 


BANKERS’  CONVENTIONS. 


THE  American  Bankers*  Association  has 
fitted  up  its  offices  at  11  Pine  street. 

New  York  city,  for  the  accommodation 

STATE  BANKERS'  CONVENTIONS  IN  1908. 


and  comfort  of  its  members,  and 
are  urged  to  call  and  make  use  of 
when  in  New  York. 


Date. 

July  23-24 
Sept.  23-24-26 
July  23-24 
July  27-28 
July  16-17 
July  23-24-25 

Week  of  Sept  27. 


State  or  Name. 

Colorado 

Maryland 

Minnesota 

Montana 

North  Dakota 


Place. 
Colorado  Springs 
Baltimore 
Duluth 
Billings 
Bismarck 


American  Institute  Providence 
of  Banking 

American  Bankers’  Denver 
Association 


Secretary. 

A.  A.  Reed 
Charles  Hann 
E.  C.  Brown 
Frank  Bogart 
W.  C.  Macfadden 
G.  E.  Allen 


Fred  E.  Farnsworth  New  York 


they 

them 


Address. 
Boulder 
Baltimore 
Minneapolis 
Helena 
Fargo 
New  York 


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New  York,  July  2,  1908. 

T>OLITICS  exercised  some  influence  over 
^ finance  last  month  and  is  partly  ac- 
countable for  the  inactivity  in  Stock 
Exchange  circles  which  prevailed.  Meas- 
ured by  the  volume  of  sales  the  stock  mar- 
ket in  June  was  the  dullest  since  1904. 
There  were  only  about  9,500,000  shares  of 
stocks  sold  in  June  as  compared  with  about 
21,000,000  shares  in  May,  11,000,000  shares 
in  April,  16,000,000  shares  in  March,  10,- 
000,000  shares  in  February  and  16,000,000 
shares  in  January. 

There  were  days  in  June  when  the  total 
sales  of  stocks  were  less  than  150,000 
shares.  Compare  this  with  the  2,000,000 
and  3,000,000  share  days  of  a few  years 
ago,  when  conditions  were  supposed  to  be 
normal,  and  the  situation  must  be  admitted 
to  have  been  wonderfully  changed.  It  is 
not  surprising  under  the  circumstances  that 
a seat  at  the  New  York  Stock  Exchange 
sold  last  month  at  $70,000,  a decline  of 
$2,000  from  the  last  previous  sale.  In  1905 
a seat  was  sold  at  $95,000  and  in  the  fol- 
lowing year  $100,000  was  offered  with  no 
sale  reported.  The  panic  last  Autumn 
caused  a decline  to  $51,000,  but  $72,000  was 
paid  since. 

A “Roosevelt  scare”  seemed  to  hang  over 
the  stock  market  almost  until  the  close  of 
the  convention  at  Chicago  which  on  June 
18  nominated  William  H Taft  for  Presi- 
dent. Reports  were  diligently  circulated 
that  there  would  be  a stampede  at  the  last 
minute  and  Theodore  Roosevelt  would  be 
named  again.  Even  the  drafting  of  the 
platform  was  credited  to  the  present  occu- 
pant of  the  White  House  and  thus  made  a 
bogy  to  frighten  Wall  Street.  After  the 
convention  had  adjourned  and  everything 
that  could  be  done  was  done,  the  market 
failed  to  show  any  improvement.  With 
another  national  convention  to  be  held  early 
in  July  to  nominate  a candidate  in  opposi- 
tion to  Mr.  Taft,  it  is  not  surprising  that 
a recovery,  if  there  is  to  be  one,  should  be 
delayed.  The  prospect  is  that  William  J. 
Bryan  will  for  the  third  time  be  the  nominee 
of  his  party.  The  Wall  Street  view  is  that 
in  this  case  the  result  will  be  a foregone 
conclusion,  and  business  generally  ought  to 
be  little  affected  by  politics  this  year. 

Aside  from  the  political  influence  there 


were  a number  of  events  and  conditions  to 
disturb  confidence,  or  at  least  to  develop 
caution.  That  general  business  is  not  in 
the  full  tide  of  prosperity  is  evident  from 
the  diminished  volume  of  bank  clearings  as 
well  as  to  the  falling  off  in  our  foreign  trade 
which  is  now  shown  in  both  imports  and 
exports. 

At  the  beginning  of  the  month  steel  man- 
ufacturers cut  the  price  of  steel  bars  $4 
a ton.  Their  action  had  the  greater  sig- 
nificance because  of  the  stand  which  the 
United  States  Steel  Corporation  had  previ- 
ously taken  in  favor  of  maintaining  prices. 
The  production  of  iron  has  again  declined, 
the  total  for  May  being  1,163,997  tons  as 
compared  with  1,149,602  tons  for  April  with 
one  working  day  less.  The  weekly  capacity 
of  the  furnaces  in  blast  on  J une  1 was  only 
260,584  tons  as  compared  with  268,674  tons 
on  May  1.  A year  ago  the  capacity  was 
523,220  tons.  On  June  9 prices  on  all  fin- 
ished steel  products  except  rails  were  cut. 

The  effect  of  bad  times  upon  the  rail- 
roads was  shown  last  month  bv  a series  of 
decreases  in  dividend  payments.  The  Mis- 
souri Pacific  passed  its  semi-annual  divi- 
dend of  2 1-2  per  cent.  The  Texas  Central 
passed  the  annual  dividend  on  its  common 
stock.  It  had  been  paying  5 per  cent.  The 
Louisville  & Nashville  reduced  its  semi- 
annual dividend  from  3 to  2 1-2  per  cent. 
The  Lake  Erie  & Western  passed  its  semi- 
annual dividend,  formerly  1 1-2  per  cent., 
on  the  preferred  stock.  The  Cleveland,  Cin- 
cinnati, Chicago  and  St.  Louis  passed  its 
semi-annual  dividend.  From  1902  to  1907 
it  paid  4 per  cent,  annually.  The  Mobile  & 
Ohio  reduced  its  dividend  from  2 1-2  to 
1 1-2  per  cent,  semi-annually  and  the  Penn- 
sylvania Company  made  its  June  30  dividend 
3 per  cent,  as  compared  with  4 per  cent, 
last  December. 

This  is  not  an  encouraging  array  for  the 
investor,  yet  railroad  men  of  authority 
speak  with  hope  regarding  the  future.  It  is 
considered  that  the  depression  which  has 
followed  the  panic  is  only  temporary,  al- 
though probably  unparalleled  in  the  wide 
spreading  results. 

The  railroads  have  suffered  a very  serious 
loss  in  earnings  in  the  last  six  months  and 
when  the  returns  for  the  fiscal  year  ended 
June  30  come  in  there  will  be  shown  a de- 


124 


THE  BANKERS  MAGAZINE. 


crease  both  in  gross  and  net  earnings  al- 
most beyond  precedent.  An  approximate 
estimate  makes  the  decrease  in  gross  earn- 
ings as  compared  with  the  previous  year 
$108,000,000,  or  4 per  cent.,  and  in  net 
earnings  $121,000,000,  or  15  per  cent.  Such 
a showing  would  make  the  ratio  of  oper- 
ating expenses  to  gross  earnings  over  70 
per  cent.  In  1899  the  ratio  was  only  a 
little  more  than  60  per  cent. 

That  railroad  traffic  has  begun  to  in- 
crease is  evidenced  by  the  needs  of  idle 
cars.  Since  last  October  until  April  19  last 
there  was  a constant  increase  in  the  num- 
ber of  cars  not  in  use.  On  the  latter  date 
413,338  idle  cars  were  reported.  The  num- 
ber was  reduced  to  404,375  on  May  13,  to 
381,779  on  May  27  aild  to  349,994  on  June 
10.  In  less  than  two  months  the  number 
has  been  reduced  63,344. 

More  favorable  reports  have  also  been  re- 


during  the  twelve  months  ended  June  30 
were  only  about  $22,000,000  larger  than 
the  expenditures  of  the  previous  year,  while 
the  disbursements  were  within  $6,000,000  of 
the  receipts  of  the  year  ended  June  30,  1907. 
The  result  is  a deficit  of  $60,000,000  as  com- 
pared with  a surplus  of  $87,000,000  a year 
ago. 

For  the  last  four  years  the  Government 
has  reported  separately  the  disbursements 
for  public  works  which  were  formerly  in- 
cluded in  “civil  and  miscellaneous”  or  “war” 
expenditures.  We  show  the  itemized  ex- 
penses for  each  of  the  four  years  in  the 
table  herewith : 

Compared  with  1905  the  total  expendi- 
tures have  increased  $92,000,000,  of  which 
$20,500,000  is  in  civil  and  miscellaneous, 
$10,600,000  in  war,  $1,300,000  in  navy  and 
$50,000,000  in  public  works.  While  expendi- 
tures have  been  increasing  revenues  also  in- 


Expenditures.  1905. 

CiVIl  and  miscellaneous $126,336,545 

War  99,616,315 

Navy  117,334,003 

Indians  14,246,568 

Pensions  141,770,955 

Public  works  43.516.201 

Interest  24,591,024 


Total  $567,411,611 

Receipts  $543,423,859 


1906. 

1907. 

1908. 

$120,924,439 

$124,117,119 

$146,898,930 

93,659,462 

101,671,881 

110,284,864 

110,956,167 

97,606,595 

118,726.347 

12,746,511 

15,140,292 

14,550,759 

141,034,081 

139,290,910 

153,887,995 

65,096,578 

76,051,271 

93,778,239 

24,310.326 

24,482,524 

21,424,990 

$568,727,564 

$578,360,592 

$659,552,124 

$594,914,714 

$665,306,134 

$599,895,763 

ceived  regarding  the  employmnt  of  labor. 
J une  1 was  called  “Re-employment  day” 
and  many  men  were  put  to  work  in  various 
sections  of  the  country.  In  St.  Louis  15,000 
men  were  given  employment.  The  Illinois 
Central  Railroad  put  back  to  work  5500  men 
who  had  been  idle  eight  months. 

The  future  prosperity  of  the  country  will 
depend  in  no  little  degree  upon  the  crops 
that  are  soon  to  be  harvested.  There  is 
much  encouragement  in  the  reports  so  far 
given  by  the  Government.  The  total  wheat 
crop  is  estimated  at  100,000,000  bushels 
more  than  the  1907  yield,  the  oats  crop 

340.000. 000  bushels  more,  rye  2,000,000  bush- 
els more  and  barley  34,000,000  bushels  more. 
The  wheat  crop  promises  to  be  within  about 

11.000. 000  bushels  of  the  banner  crop  of 
1901,  which  aggregated  748,000,000  bushels. 

The  money  situation  continues  to  grow 
easier.  Call  money  in  New  York  touched  1 
per  cent  on  June  23  and  is  still  quoted  as 
low  as  1 1-2  per  cent.  The  New  York  banks 
have  accumulated  a surplus  reserve  of  $66,- 
000,000,  the  largest  ever  reported,  except  in 
1894. 

An  almost  complete  reversal  of  condi- 
tions as  compared  with  the  previous  year  is 
shown  by  the  United  States  Treasury  for 
the  fiscal  year  just  ended.  The  receipts 


creased  until  the  year  juct  ended.  The  re- 
ceipts were  $65,000,000  less  than  in  1907  and 
only  about  $5,000,000  more  than  in  1906. 
With  increasing  expenses  and  decreasing 
receipts,  the  showing  for  the  year  1907-08 
is  the  worst  in  many  years. 

With  a presidential  campaign  impending 
inquiry  as  to  the  growth  of  public  expendi- 
tures during  different  presidential  terms 
suggests  itself.  A growing  country  may  be 
expected  to  show  an  increase  in  cost  of 
Government,  yet  it  will  be  c surprise  to  find 
that  the  expenditures  in  the  last  year,  ex- 
clusive of  interest,  were  larger  than  in  any 
previous  year  since  the  Civil  War  and  larger 
even  than  when  the  Spanish  War  was  call- 
ing for  extraordinary  disbursements.  In 
the  accompanying  table  aic  shown  the  high- 
est and  low’est  annual  expenditures,  exclusive 
of  interest,  during  each  of  the  last  ten 
presidential  terms. 

Each  term  is  taken  to  extend  to  June  30 
following  the  termination  of  incumbency, 
and  excludes  the  first  four  months  of  the 
four-year  period.  It  will  be  seen  that  dur- 
ing the  three  terms  of  Grant  and  Hayes 
the  expenses  never  went  up  to  $200,000,000 
in  a single  year  and  in  1878  fell  to  $134,000,- 
000. 

Under  Arthur  and  Cleveland — first  term 
— the  annual  expenditure  never  went  as  high 


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MONEY,  TRADE  AND  INVESTMENTS. 


125 


as  $241,000,000,  while  under  Harrison  the  ment  deposits  and  circulation  show  an  in- 

lowest  was  $261,000,000  and  the  highest  crease  as  compared  with  February  14,  1908, 

$356,000,000.  Cleveland  in  the  second  term  the  date  of  the  last  previous  statement.  The 

kept  the  maximum  expenditure  down  to  figures  will  be  studied  for  their  significance 

$339,000,000,  but  the  lowest  was  above  as  to  the  change  that  has  taken  place  in  the 

$316,000,000.  The  Spanish  War  raised  the  business  situation.  The  increase  in  loans 

maximum  under  McKinley  to  $565,000,000,  since  February  14  is  nearly  $106,000,000,  the 

but  the  lowest  in  his  term  was  $405,000,000.  largest  recorded  for  any  statement  period — 

The  high  record  was  nearly  reached  under  the  statements  are  issued  five  times  a year 

Roosevelt  in  his  first  term  and  has  been  and  cover  irregular  periods — since  the  state- 

exceeded  by  $80,000,000  in  his  second  term,  ment  for  March  14,  1905.  The  increase  is 

of  which  a year  still  remains.  It  is  claimed  not  so  large  by  $57,000,000  as  the  decrease 

Largest  Sjnallest 

Year.  Amount.  Year.  Amount. 


Grant,  1st  term 1873  $180,488,637  1872  $153,201,856 

Grant.  2d  term  1874  194,118,986  1877  144,209,963 

Hayes  1881  177,142,897  1878  134,463,462 

Arthur  1885  208,840,678  1882  186,904,232 

Cleveland,  1st  term  1889  240,995,131  1886  191,902,992 

Harrison  1893  356,213,562  1890  261,637,202 

Cleveland,  2d  term  1894  339,683,874  1896  316,794,417 

McKinley  1899  565,175,255  1898  405,783,526 

Roosevelt,  1st  term  1904  557,755,831  1902  442, Q82, 81-2 

Roosevelt,  2d  term  1908  638,127,134  1906  544.476,223 


by  the  Secretary  of  the  Treasury  that  the  between  December  3,  1907,  and  February  14, 

unfortunate  showing  made  for  the  fiscal  1908,  and  the  loans  are  still  $150,000,000  less 

year  just  closed  is  due  to  an  antequated  than  they  were  on  August  22,  1907,  and  $7,- 

svstem  of  bookkeeping,  and  that  expendi-  000,000  less  than  on  March  22  last  year, 

tures  are  charged  under  the  head  of  “ordi-  It  would  be  necessary  to  go  back  to  No- 
nary” which  should  not  be  so  considered,  as  vember,  1904,  to  find  as  large  an  increase 

for  instance  expenditures  on  the  Panama  in  deposits  as  that  now  reported  for  the 

Canal  and  the  election  of  public  buildings.  period  under  review.  The  increase  exceeded 

It  is  only  right  that  due  allowance  should  $206,000,000,  or  within  about  $7,000,000  of 

be  made  for  that  class  of  disbursements  the  total  decrease  reported  between  August 

which  in  the  case  of  individuals  or  private  22,  1907,  and  February  14,  1908.  Deposits 


Loans.  Individual  deposits. 

. Changes  since  Changes  since 


Amount. 

previous  report. 

Amount. 

previous  report. 

April 

6. 

1906.. 

.$4,141,176,698 

Increase 

$70,135,534 

$3,978,467,885 

Decrease 

$109,952,249 

June 

18. 

1906.. 

. 4,206,890.078 

Increase 

65,713,379 

4,055,873,636 

Increase 

74,405.750 

Sept. 

4. 

1906.. 

. 4,298,983,316 

Increase 

92,093,237 

4,199,938,310 

Increase 

144,064,673 

Nov. 

12, 

1906.. 

. 4,366,045.295 

Increase 

67,061,979 

4,289,773,899 

Increase 

89,835.588 

Jan. 

26, 

1907.. 

. 4,463.267.629 

Increase 

97,222,333 

4,115,660,294 

Decrease 

174,123,605 

Mar. 

22, 

1907.. 

. 4.535,844,098 

Increase 

72.576,468 

4.269,511,629 

Increase 

153,861,334 

May 

20. 

1907.. 

. 4,631,143,691 

Increase 

95,299,593 

4,322.880,141 

Increase 

53,368,512 

Aug. 

22. 

1907.. 

. 4,678.583.968 

Increase 

47,440,277 

4,319,035,402 

Decrease 

3,844,738 

Dec. 

3. 

1907.. 

. 4,585.337,094 

Decrease 

93,246,874 

4,176,873,717 

Decrease 

142,161,685 

Feb. 

14, 

1908.. 

. 4,422,353,647 

Decrease 

162,983,446 

4,105,814,418 

Decrease 

71,059,299 

May 

14, 

1908.. 

. 4.528,346,875 

Increase 

105,993,227 

4,312,656,789 

Increase 

206,842.371 

corporations  would  be  charged  against  capi- 
tal account  instead  of  into  income  account, 
but  after  making  such  allowance  it  will  be 
evident  that  the  Government  is  increasing 
its  running  expenses  very  rapidly. 

The  statement  of  the  Comptroller  of  the 
Currency  showing  the  condition  of  the  na- 
tional banks  of  the  United  States  on  May 
14,  1908,  makes  an  encouraging  exhibit. 
All  the  principal  items  outside  of  Govern- 


are  now  within  about  $10,000,000  of  the 
highest  record  which  was  made  on  May  20, 
1907. 

A comparative  table  herewith  shows  the 
changes  in  loans  and  deposits  as  reported 
in  each  statement  to  the  Comptroller  of  the 
Currency  since  April  6,  1906. 

Until  the  panic  of  last  year  the  loans 
increased  continuously  for  a long  time. 
Between  January  29,  1906,  and  August  22, 


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126 


THE  BANKERS  MAGAZINE. 


1907,  loans  increased  over  $600,000,000. 
During  the  same  time  deposits  increased 
only  about  $230,000,000.  Now,  however,  de- 
posits are  increasing  more  rapidly  than 
loans,  a fact  which  is  of  some  significance 
so  far  as  it  indicates  a decline  in  business 
activities. 

It  has  frequently  occurred  in  times  of 
financial  distress  that  the  most  serious 
drain  upon  bank  resources  has  been  through 
the  withdrawal  by  banks  of  funds  on  deposit 
with  depositary  institutions.  A partial  in- 
vestigation on  this  point  as  to  the  panic 
period  of  last  year  is  afforded  in  the  accom- 
panying table: 


$10,000,000  since  February  and  $23,000,000 
since  May  last  year. 

The  clearing-house  certificates  used  in 
the  panic  have  practically  been  retired.  In 
the  resources  there  appears  only  $1,265,821 
as  compared  with  $64,344,128  on  December 
3 last.  In  the  liabilities  the  amount  is  cut 
down  from  $74,461,026  on  December  3 to 
$108,368  on  May  14. 

The  Money  Market. — The  local  money 
market  continues  to  be  easy,  even  the  usual 
stiffening  of  rates  prior  to  July  1 not  occur- 
ring this  year.  Call  money  was  as  low  as  I 
per  cent,  while  time  money  is  in  little  de- 
mand. Even  the  supply  of  commercial 


Due  to  May  20, ’07.  Aug.22,  ’07.  Dec.  3,  ’07  Feb.  14,  ’08.  May  14. ’08. 

Other  National  Banks..  $875,767,698  $823,680,087  $708,919,278  $807,361,613  $S37.330.002 

State  Banks  and  Bankers  397,038,415  395,745,495  318,969,687  364,501,816  371.549.629 

Trust  Cos.  and  Sav.  Bks.  372,404,269  337,927,872  323,321,475  379,277,946  447.651,904 

Approved  Reserve  Agents  40,329,666  38,139,919  36,675,751  33,285,361  35,890.169 


Total  due  banks $1,685,540,048  $1,595,493,373  $1,387,886,191  $1,584,426,736  $1,692,421,704 

Individual  deposits  $4,322,880,141  $4,319,035,402  $4,176,873,717  $4,105,814,418  $4,312,656,7S9 


Between  May  20  and  August  22,  1907, 
while  individual  deposits  were  reduced  $3,- 
844,738,  the  amount  due  banks,  trust  com- 
panies and  savings  banks  declined  $90,04.6,- 
674.  Between  August  22  and  December  3, 
individual  deposits  fell  off  $142,161,685  and 
bank  deposits  $207,607,182.  The  extreme 
loss  in  individual  deposits  from  May  to  De- 
cember was  $146,000,000,  while  against  this 
the  amount  due  banks,  bankers,  etc.,  was 
reduced  over  $297,000,000.  The  reduction 
in  amount  due  other  national  banks  was 
about  20  per  cent,  and  the  same  is  true  as 
regards  state  banks  and  bankers.  The 
amount  due  trust  companies  and  savings 
banks  was  reduced  13  per  cent.,  and  in- 
dividual deposits  less  than  3 1-2  per  cent. 

It  is  also  of  some  interest  to  note  that 
the  specie  holdings  of  the  national  banks 
increased  $62,000,000  since  February,  which 
makes  the  total  $67,000,000  more  than  on 
December  3,  1907,  and  $146,000,000  more 
than  on  May  20,  1907,  before  the  panic  oc- 
curred. Legal-tender  holdings  increased 


paper  is  limited.  At  the  close  of  the  month 
call  money  ruled  at  1^4  @2  per  cent.,  with 
the  majority  of  loans  at  1V4  per  cent. 
Banks  and  trust  companies  loaned  at  1 
per  cent,  as  the  minimum.  Time  money  on 
Stock  Exchange  collateral  is  quoted  at  1 Vi 
per  cent,  for  30  days,  1%@2  per  cent,  for 
sixty  days,  2@2*4  per  cent,  for  four  months, 
3@3%  per  cent,  for  five  months,  3%  per 
cent,  for  six  months  and  3%  @4  per  cent, 
for  seven  months  on  good  mixed  collateral. 
For  commercial  paper  the  rates  are  3^ 
per  cent,  for  sixty  to  ninety  days’  endorsed 
bills  receivable,  per  cent,  for  first-class 
four  to  six  months*  single  names,  and  4% 
(a  5 per  cent,  for  good  paper  having  the 
same  length  of  time  to  run. 

New  York  Banks. — The  feature  of  the 
bank  statement  to  command  the  most  at- 
tention is  the  increase  in  the  surplus  reserves 
to  over  $66,000,000  last  month.  It  is  neces- 
sary to  go  back  to  1894  to  find  any  parallel 
for  these  figures.  That  was  a period  when 
bad  times  caused  a piling  up  of  money  in 


Money  Rates  in  New  York  City. 


Feb.  1. 


Cali  loan?,  bankers’  balances 

Call  loans,  banks  and  trust  companies 

Bi  okers'  loans  on  collateral,  30  to  60  days 

Brokers’  loans  on  collateral,  90  days  to  4 

months 

Brokers’  loans  on  collateral.  5 to  7 months. . . 
Commercial  paper,  endorsed  bills  receivable, 

60  to  90  days 

Commercial  paper,  prime  single  names,  4 

to  6 months  

Commercial  paper,  good  single  name?,  4 to 
6 months 


Per  cent. 
H4“2 

lsH-H 

- H 
4 14- 


5H-6 

514—6 

6-14 


Mar.  1. 

April  1. 

Mayl. 

June  1. 

July  J. 

Percent. 
H4-2  | 

114-2 

4 - 

Per  cent. 
114-2 
114-14 
3 — 

Percent. 

194—2 

m- 

214  14 

Per  cent. 
114 -H 
H4-  1 

2k-  j 

Per  cent . 

m-2 

1 114-2 

4 -v4 
414-^ 

314-4 
4 - 

214-314 

314-94 

244-814 

314-4!* 

2 -2*4 
314—4 

414-5 

5 -14 

4 -14 

314-4 

314- 

5 —14 

514- 

4 —14 

4 -14 

414— 

514-6 

- 

414-5 

414-  5 

i 


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MONEY,  TRADE  AND  INVESTMENTS. 


127 


the  banks  and  the  surplus  reserve  on  Feb- 
ruary 3,  1894,  reached  $111,623,000.  For 
months  the  surplus  kept  increasing,  but 
that  has  not  been  the  case  since  the  panic 
of  last  year.  The  first  statement  of  this 
year  showed  a deficit  of  $11,000,000  on 
January  4.  By  February  1 there  was  a sur- 
plus of  $40,000,000.  The  next  week  it  fell 


to  below  $30,000,000  then  increased  almost 
continuously  until  May  16,  when  it  was 
over  $64,000,000.  On  June  6 it  fell  to  $47,- 
000,000  and  in  the  following  three  weeks 
increased  $19,000,000.  Loans  and  deposits 
both  reached  the  highest  point  on  June  20. 
Loans  increased  net  for  the  month  $16,- 
000,000  and  deposits  $34,000,000. 


New  York  Clearing  House  Banks — Average  Condition  at  Close  op  Each  Week. 


Dates. 

Loans.  | Specie. 

txgal 

tenders. 

Net 

Deposits. 

Surplus 

Reserve. 

('imita- 

tion. 

Clearings . 

May  »... 
June  6...1 
- 13... 

“ 20... 
‘ 27... 

\ $1,215,118,500  , $298,729,800 
, 1,211,601,900  295,945,300 

1,213.866,600  1 801,467,500 
1 1,239,922,100  | 312,117,300 
1,231,220,800  316,670.2CO 

$70,627,400 
I 71,872,000 
1 74,247.000 

; 76.909,200 

79.472,700 

$1,285,788,800 

1.282.600.400 

1.289.256.400 
1,821,258,500 

1.320.176.400 

$47,910,000 
47,192,200 
53,391,8(0 
o8,711  875 
66,098,800 

$57,150,400 
56,830.800 
66,631,400 
. 7,615,700 
56,809.200 

$1,281,153,500 

1,726,218,500 

1,158,854,100 

1,247,580,6(0 

1,164,260,274 

New  York  Clearing  House  Banks — Actual  Condition. 


Dates. 

Loans. 

Specie. 

Legal  Tenders. 

Net  Deposits. 

Reserve  Held. 

May  29 

$1,218,677,900 

$296,382,700 

$72,206,300 

$1,280,304,200 

$368,689,000 

Juue  6 

1,21 1,015,200 

297,220,500 

73,085,400 

1,284,120,700 

370, 3«  >5,900 

“ 13 

1,219.468,300 

305,413,900 

75,598,500 

1,297,360,500 

<>81,012,400 

**  20 

1,242,809,200 

314,197,5  0 

75,910,300 

1,327,336,400 

393,107,800 

“ 27 

1,223,061,500 

816,:  68,400 

79,721,800 

1,312,988,700 

393,480.200 

1 

State  Banks  and  Trust  Companies  Outside  of  Clearing  House — Average  Condition. 


Dates.  Loans. 

Specie. 

Legal  Tenders. 

1 

! Net  Deposits. 

Gross  Deposits. 

Reserve  on 
Deposits 

May  29 $866,760,000 

June  6 | 881,218.500 

**  13  892.550.200 

- 20 896,451,300 

“ 27 935,177,800 

$52,306,800 
55.  <25,600 
59,720,300 
61.008,200 
ft), 508.700 

$12,077,200 
12,171,300 
12.437.500 
12  184,000 
12,735,000 

$722,442,700 

742,324,6(10 

757.621.100 
762,401,400 

776.249.100 

$921,000,600 
941,845.700 
950,664, 4nU 
959,087.200 
974,765,900 

$301,687,800 

306,442,200 

304,162,500 

308,113,300 

812,367,600 

State  Banks— Average  Condition. 


Dates. 

Loans.  \ 

Specie. 

Legal  Tenders. 

| Gross  De  posits. 

Reserve  on 
Deposits. 

May  29 

$266,805  500 

$59,671,900 

$20,192,200 

$318,961,400 

$98,070,  ICO 

June  6 

267.089,300 

56.267.100 

20,159.600 

317.017,700 

95,174.600 

“ 13 

267.3i9.500  1 

55.540,700 

20.8«6,2UU 

320,135,000 

95,930,300 

“ 2* 

267,218,800 

58,592,900 

18.027,300 

322,522,200 

96.887,100 

**  27 

218,426,200 

59,134,000 

21,717,700 

32i,556.8C0 

101,286,900 

Trust  Companies — Average  Condition. 


Date*. 


Loans. 


Sficcie. 


May  *9 ! $787,166,200  $48,036,800 

June  6 800,982.300  51,788,300 

- 13  812,704,001)  55,579  900 

- 20 ! 816,92P,2fO  | 51,363,100 

M 27 | 824.254,000  I 53,909.300 


Legal  Tenders.  Gross  Deposits.  | ^^cpmits1 


$5,854,700 

5.829.100 
5,907,700 

5.756.100 
5,895.200 


$827,773,200 
847,508,100 
853,651 ,800 
862,789.700 
877,011,200 


Digitized  by 


$276,125,600 

280.945.200 
277,552,100 

280.423.200 
284,271,800 


Google 


128 


THE  BANKERS  MAGAZINE, 


Deposits  and  Surplus  Reserve  on  or  About  the  First  of  Each  Month. 


im. 

t907. 

1908. 

Month. 

Deposits. 

Surplus 

Deserve. 

Deposits. 

Sun>iw> 

Reserve. 

Deposits. 

Surjdus 

Reserve. 

January 

February 

March ... 

April 

May 

June 

July 

August 

September 

October 

November 

December 

$977,651,300 

1.061.403.100 

1.029.545.000 
1,004,290,500 

1.028.683.200 

1.036.761.100 

1.049.617.000 
1.060,110,900 

1.042.057.200 

1.034.059.000 

1.015.834.100 
998,634,700 

$4,292,575 

11,127,625 

5,008,755 

5,131,270 

10.367.400 
6,816,025 

12,055,750 

18,892,475 

2.869.400 
12,540,350 

3.049,776 

1,449,125 

$981,301,100 

1.076.720.000 

1.038.431.800 

1.019.817.300 

1.106.183.300 

1.128.194.000 
1,092,031,700 
1.099,302,400 

1.046.655.800 
1 1,055,193,700 
i 1,051,786.900 

1.083.283.300 

$5,369,225 

12,634.100 

3,857,850 

13.131.275 
12,346,775 
12,783,450 

2.500.275 
7,478,200 
8.756,450 
5.646,675 

*38,838,825 

*52,989,426 

$1,050,925,400 

1,138,501,500 

1,167,023,700 

1.189.334.300 

1.257.759.300 
1.285.788,800 
1,320.176,400 

*$20,170,350 

40,526.725 

29,262,675 

39,788,525 

62,352,900 

47.910.000 

06,098,800 



Deoosits  reached  the  highest  amount,  $1,321,258,500,  on  June  20,  1908;  loans,  $1,239,922,100  on 
June  20,  1008,  and  the  surplus  reserve  $111,023,000  on  Feb.  3,  1894.  * Deficit. 

Non-Member  Banks— New  York  Clearing-House. 


Dates. 

Loans  and 
Investments. 

Deposits. 

Specie . 

Legal  len- 
der and 
bank  notes. 

Deposit 
with  Clear- 
ing-House 
agents. 

Deposit  In 
other  N.  Y. 
banks. 

Surplus 
Reserve . 

May  29 

June  6 

13 

“ 20 

$ “ 27 

$85,993,900 

86,869.200 

80.262,600 

86,304,000 

86,482,400 

$100,275, 9f»0 
101,104,700 

102.713.800 

103.993.800 
103,356,2(0 

$6,274,500 

6,100,900 

5,382.400 

5,737,800 

5,965,300 

$6,784,900 

6,863,200 

7.076.000 

7.177.000 
7,824,800 

$14,529,000 

13,748,700 

15.481.600 

16.090.600 
14,956,000 

$4,407,810 

4,558,500 

4,128.000 

4,177,900 

4,000,700 

$5,926,725 

4,990,125 

6,389,550 

7,184,850 

6,407,750 

Boston  Banks. 


Datbs.  1 Loans. 

Deposits. 

Specie. 

Ijcaal 

Tenders. 

Circulation. 

Clearings. 

May  29 ($189,409,000 

June  6 191,323,000 

“ 13 1 191,325,000 

“ 20 190,329,000 

“ 27 189,587,000 

1225,134,000 

227.368.000 

229.434.000 

281.603.000 

227.840.000 

$21,465,000 

21,201,000 

22.377.000 

23.723.000 

24.096.000 

||||| 

«wrfco» 

$10,561,000 

10,668.000 

10.582.000 

10.548.000 

10.501.000 

$112,251,800 

157,742.400 

132.629,700 

121,437.100 

115,279,91)0 

Philadelphia  Banks. 


Dates. 

Loans. 

Deposits. 

Lawful  Money 
Reserve. 

May  29 

$225,331,000 

1264,145,000 

$71.874,0C0 

June  6 

2^6,837.000 

868,596,000 

73,507,000 

13 

227,027,000 

268,450,000 

73,018,000 

“ 30 

228,024,000 

271,616,000 

76,230,000 

M 27 

230,470,000 

272,666.000 

74.270,000 

Circulation. 


$17,132,000 

17.020.000 

18.601.000 

16.398.000 

16.248.000 


Clearing*. 


$88,554,000 

134,756,400 

103.357,100 

108,010,000 

104.060,500 


Foreign  Banks. — More  than  $50,000,000 
of  gold  went  into  the  principal  European 
banks  last  month.  The  Bank  of  England 
gained  $9,000,000,  the  Bank  of  France  $23,- 
000,000,  the  Bank  of  Germany  $18,000,- 
000,  and  the  Bank  of  Russia  $2,000,000. 
The  Bank  of  France  has  nearly  $80,000,000 
more  gold  than  it  had  a year  ago. 

Foreign  Exchange. — Sterling  exchange 
has  been  irregular  and  late  in  the  month 
was  quiet  without  any  special  feature. 


Rates  generally  are  lower  than  they  were 
a month  ago. 

Money  Rates  Abroad. — Rates  for  money 
in  the  foreign  markets  have  declined,  but 
the  Imperial  Bank  of  Germany  was  the 
only  European  bank  to  reduce  its  posted 
rate  of  discount.  On  June  3 the  rate  was 
reduced  from  5 to  4%  per  cent,  and  on 
June  17  to  4 per  cent.  On  June  25  the 
Bank  of  Bombay  reduced  its  rate  from  7 
to  6 per  cent,  and  the  Bank  of  Bengal  from 


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MONEY,  TRADE  AND  INVESTMENTS.  129 


Gold  and  Silver  in  thb  European  Banks. 


May  I,  1908. 

June  U 1908. 

July  1.  1908 . 

Gold. 

Silver. 

Gold. 

SOver. 

Gold. 

Silver. 

Rnrland , 

£37.850,440 
113,886,354 
84,501.'  00 
112,107,000 

46.623.000 

15.542.000 

86.836.000 
7,697,900 
4,081,388 
8.896.0UO 

8.389.000 

1.670.000 

£87,674,499 

121,318,489 

86.870.000 
111,400,000 

46.758.000 

15.576.000 

86.823.000 
7,700,400 
4,171.838 

3.892.000 

8.432.000 

1.498.000 

£89,404,613 

128,066,687 

40.058.000 
111,827,000 

46.800.000 
15.610.0C0 

36.282.000 
7.703,100 
4,150,667 
8,886.000 

3.603.000 

1.453.000 

France 

Germany 

Russia. 

Austria-Hungary..  

Spain 

Italy 

Netherlands 

Nat.  Belgium 

Sweden 

£86,211,550 

14.800.000 

6.956.000 

13.434.000 

28.894.000 

4.400.000 
4,366.200 
2.040,667 

£86,684,171 

16.073.000 

7.566.000 

13.385.000 

26.577.000 

4.895.000 
4,315,306 
2,085.667 

£37,843^90i 

16,601,000 

7.651.000 

13.339.000 

26.850.000 

4.300.000 
4,266,400 
2,075,838 

Switzerland 

Norway 

Totals 

6417,059,027 

£108,092,417 

£426,108,671 

£110.051,188 

£436,773,067 

£112,925,634 

Rates  for  Sterling  at  Close  of  Eacu  Week. 


Wm  ended. 

Bankers' 
60  day ».  | 

Sterling. 

Sight. 

Cable 

transfer*. 

Prime 

commercial. 

ljong. 

Documentary 

Sterling. 

60  days. 

May  29 

June  6 

- 13 

- 20. 

“ 27 

4.8555  A 4.8665 
4.8540  A 4.8550 
4.8530  A 4.8640  | 
4.8550  A 4.8660  1 
4.8570  A 4.8575 

4.8715  A 4.8720 
4.8690  A 4.8096 
4.8680  A 4.8685 
4.8605  A 4.8700 
4.8005  A 4.8700 

4.8740  A 4.8750 
4.8710  A 4.8720 
4.8705  A 4.8710 
4.8710  A 4.8725 
4.8720  A 4.8730 

a 

4.86* 

\im\ 

A 4.85 

it  as 

4.84M 

4.8414 

m 

:S8B 

i A 4.85 

Foreign  Exchange— Actual  Rates  on  or  About  the  First  of  Each  Monte. 


Sterling  Bankers  SO  days 

- “ Sight 

- “ Cables 

M Commercial  long 

“ Docu'tary  for  paym't. . . 

Pari*— Cable  transfers 

- Bankers'  00  days 

M Bankers'  sight 

Swiss— Bankers'  sight 

Berlin— Bankers'  00  days. 

~ Bankers'  sight 

Amsterdam— Bankers'  sight... 

Kronor*— Bankers'  sight 

Italian  Urn— sight 


6 to  5 per  cent.  Discounts  of  sixty  to 
ninety-day  bills  in  London  at  the  close  of 
the  month  were  1^4  per  cent.,  against  1% 
per  cent,  a month  ago.  The  open  market 


rate  at  Paris  was  1%  per  cent,  against 
1%@2  per  cent,  a month  ago,  and  at  Ber- 
lin and  Frankfort  3%  @3%  per  cent., 
against  3%  per  cent,  a month  ago. 


Bank  of  England  Statement  and  London  Markets. 


| Mar.  81. 1908. 

Apl.SO , 1908 . | 

May  81.  1908. 

June  so.  1908. 

Circulation 

£78.905,000 

£28,646.000 

£28.462,000 

£28,992,000 

Public  deposits 

15,6**0,006 

9,992,000 

10.425,000 

10,170,000 

Other  deposits 

43,464,000 

43,132,000 

42,812,000 

46,167.000 

Government  securities 

13.76H, 000 

14,314,000 

14,575.000 

15,237,000 

Other  securities 

35,430,000 

29.480,000 

28,826,000 

30,023,000 

Reserve  of  notes  and  coin 

29,268,000 

27.156,000 

27,662,000 

28,861,000 

Com  and  bullion 

39,722,849 

37,350,440 

37,674,499 

39.226,000 

Reserve  to  liabilities 

49.504 

51.06$ 

51.90$ 

51.17$ 

Bank  rate  of  discount 

34 

3* 

21*$ 

Price  of  Consols  '214  per  cents.) 

87* 

88* 

87* 

87*4 

Price  of  silver  per  ounce 

*5  Ad. 

24*d. 

24Hd. 

24$d. 

9 


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130 


THE  BANKERS  MAGAZINE. 


Silver. — The  price  of  silver  in  London 
after  declining  to  24V4d.  on  June  2,  ad- 
vanced to  25 %d.  on  June  23  and  then  de- 
clined to  24%d.,  the  closing  price  for  the 
month.  The  net  movement  shows  an  advance 
of  5-16d.  for  the  month. 


000,  so  that  the  loss  for  the  full  fiscal  year 
will  probably  approximate  $240,000,000. 
There  was  a net  loss  of  gold  by  export  in 
May  of  $23,000,000,  but  for  the  eleven 
months  ended  May  31  there  was  a net  im- 
port movement  of  $81,000,000. 


Monthly  Range  op  Silver  in  London— 1906,  1907,  1908. 


Month. 

1906. 

| 1907. 

| 1908 . | 

Month. 

19u6. 

| 1907.  | 1908. 

High] 

Low. 

High 

Low. 

High 

Low. 

High 

Low. 

High 

Low. 

High 

Low 

January 

February  

March 

April 

May 

June 

m 

30/ 

3U> 

m 

3M 

B 

i 

B 

29  M 

mk 

99 

29** 

22/- 

mi 

32/. 

3 2% 

3ft  i 

31H, 

31* 

31M 

31H 

»• 

Si 

26*4 

2SA 

26*1 

25V* 

24IJ 

26** 

3* 

26/. 

24/. 

24 

2444 

July 

August 

September 

October 

November 

December 

80/. 

si 

3ft 

8*A 

a 

P 

31 A 

81 U 

K 

P 

81 

814* 

814* 

27/. 

2®  i. 

24* 

Foreign  and  Domestic  Coin  and  Bullion— Quotations  in  New  York 


Sovereigns 

Bank  or  England  notes. 

Twenty  francs. 

Twenty  marks. 

Twenty-five  pesetas... 
Spanish  doubloons 


Bid. 

Asked. 

Bid. 

J&hed. 

$4.85 

$4.88 

Mexican  doubloons 

115.66 

4.88 

4.90 

Mexican  20  peso* 

19.66 

8.90 

8.96 

Ten  guilders 

8.96 

4.06 

4.75 

4.80 

Mexican  dollars 

.66 

4.78 

4.82 

Peruvian  soles 

.46 

15.50 

15.65 

Chilian  pesos 

.46 

Bar  silver  in  London  on  the  first  of  this  month  was  quoted  at  24ttd.  per  ounce.  New  York 
market  for  commercial  silver  bars,  53*6&56V*c.  Fine  silver  (Government  assay),  63*4  0 56V4c.  The 
official  price  was  53**c. 


Foreign  Trade. — The  decline  which  has 
occurred  in  the  import  trade  of  the  country 
during  the  last  six  months  has  exerted  a 
natural  influence  upon  exports.  The  imports 
of  merchandise  in  May  were  valued  at  only 
about  $84,000,000,  the  smallest  for  that 
month  in  any  year  since  1904.  Compared 
with  1907  there  is  a decrease  of  $42,000,000. 
Exports  were  valued  at  $113,000,000  the 
smallest  also  since  1904,  and  $21,000,000  less 
than  in  May  1907.  The  exports  for  the 
eleven  months  ended  May  31  are  only  $2,- 
000,000  more  than  for  the  same  time  last 
year  and  when  the  returns  for  June  are  in 
the  total  for  the  year  will  be  less  than  for 
the  previous  year.  The  imports  for  the 
eleven  months  show  a decrease  of  $219,000,- 


National  Bank  Circulation. — For  the 
first  time  in  a long  period  there  was  a de- 
crease in  the  amount  of  national  bank  notes 
outstanding  last  month.  The  decrease  is 
only  $115,600,  although  the  circulation  se- 
cured by  Government  bonds  was  reduced 
nearly  $1,500,000.  More  than  $75,000,000  of 
the  total  circulation  is  now  represented  by 
lawful  money  on  deposit  with  the  U.  S. 
Treasurer  to  retire  bank  notes.  There  was 
a decrease  of  nearly  $900,000  in  Government 
bonds  deposited  to  secure  circulation. 

Government  Revenues  and  Disburse- 
ments.— The  Government  reports  a surplus 
of  nearly  $4,000,000  for  the  month  of  June, 
a result  obtained  by  the  usual  financial 
cleaning  up  which  marks  the  last  month 


Exports  and  Imports  op  the  United  States. 


Month  of 

Merchandise. 

Gold  Balance . 

Silver  Balance. 

Mat. 

Exports. 

Imports. 

Balance. 

1908 

$100,929,591 

$79,035,137 

Exp.,  521.894,454 

Exp.  $13,025,423 
“ 32,586.471 

Exp.,  9585.831 

1904...... 

89.886.925 

80,698,161 

•*  9,188,764 

“ 3,114,668 

1905 

123.7v8.369 

92.525,424 

•*  31,268.145 

Imp.,  2,175,673 

“ 1.684,477 

1906 

180,548.387 

104,009,197 

“ 26.639,190 

“ 29,188.880 

“ 1.183.587 

1907 .1 

134,759,568 

126.612,106 

“ 8,247.462 

Exp.,  1,828,281 
23,486,611 

763.120 

1908 | 

118,397,223 

84,231,443 

“ 29,165,780 

666.156 

Eleven  Months. 

1903 

81,324,918,833 

943.719,460 

Exp.,  381,189,373 

Imp.,  7,631.467 

Exp..  20.581,163 

1904 ' 

1,367,602,405 

909.930,136  i 

“ 457,672.269 

14,231.693 

“ 30.145,655 

1906 j 

1,897,408,180 

1.027.086,826 

**  370,342,354 

Exp.,  87,063^32 

“ 18,975,400 

1908 1 

1,618,830,517 

1,125,782,375 

“ 493,048,142 

Imp.,  68,535,451 

“ 20.668.149 

1907 

1,743,111,448 

, 1.821.911.210 

“ 421.200,288 

84,817,871 

•*  1 1 ,908,396 

1908  

1,745,190,911 

| 1,102,533,752 

1 

642,657,159 

“ 81,049,842 

“ 12.806,336 

Digitized  by  LaOOQle 


MONEY,  TRADE  AND  INVESTMENTS 


131 


of  the  fiscal  year.  The  full  year,  however, 
shows  an  excess  of  nearly  $60,000,000  of 
expenditures  compared  with  an  excess  of 
$87,000,000  receipts  in  the  previous  years. 


The  total  receipts  were  $65,000,000  less 
than  in  1906-7  while  expenditures  increased 
$81,000,000.  The  loss  in  customs  receipts 
alone  was  $47,000,000. 


National  Bank  Circulation. 


! 

Mar . 31. 1908. 

Apl.  30 , 1908. 

May  31 , 1908.  j 

June  so , 1908. 

Total  amount  outstanding 

Circulation  based  on  (J.  S.  bonds 

Circulation  secured  by  lawful  money 

U 8.  bonds  to  secure  circulatlou  : 1 

Pour  per  cents,  of  1925 

Three  per  cents,  of  1908-1918 

Two  per  cents,  of  1960 

Panama  Canal  2 per  cents 

Certificates  of  Indebtedness  3 per  cent 

Total 

$696,407,855 
628,834,336 
6i, 673,019 

16.258.750 
9,877,120 

557,277,400 

65,327,800 

16.263.750 

$697,645,698 

025,4*4,375 

72,220,828 

15,470,760 

9,265,700 

554,263,700 

35,652.780 

14,186,500 

$698,449,517 

624.714,147 

70,735.370 

15,082,250 

9.468,440 

558,837.450 

86.511,620 

14,186.500 

$698,833,917 

623.250.617 

75,083,410 

14.824,250 

9,752.440 

552.863.200 

86.520,740 

14,186,500 

$682,422,670 

$628,889,480 

$629,081,160 

$628,147,180 

Tbe  National  B inks  have  also  on  deposit  the  following  bonds  to  secure  public  deposits : 4 per  cents, 
of  1935,  $8,620,950;  3 per  cents,  or  19U6-1918,  $8,296.300 ; 2 per  cents,  ot  1960,  $49,654,260;  Panama  Canal  2 per 
oents.  $17,125,800;  District  of  Columbia  8.65’s,  1924,  $2,621,000;  Hawaiian  Islands  bonds,  $2,004,000; 
Philippine  loan,  $8,972,000;  state,  city  and  railroad  bonds,  $88,389,220;  Porto  Rico,  $770,000;  certificates 
of  indebtedness  3 per  cent.,  $ ; a total  of  $180,459,420. 


United  States  Treasury  Receipts  and  Expenditures. 


Kbciipts. 

| Expenditures. 

June , 

Since 

June, 

Nines 

Source. 

1908. 

July  1. 1907. 

Source. 

1908. 

July 1, 1907 

Customs 

$22,831,775 

1285,680,658 

Civil  and  mis 

...  $12,122,162 

fUfl.898,880 

Internal  revenue... 

23,776,019 

250,714,008 

War 

Navy 

7,608,676 
...  10.158,685 

110,284,864 

118,726,347 

Miscellaneous 

6,880,818 

68,501,102 

Indians 

1,871,106 

14,650,769 

Pensions 

...  11.488,467 

153.887,995 

Public  works 

6,630,288 

98,778.239 

Total 

$58,488,612 

$599,805,763 

Interest 

167.047 

21,424,990 

Excess  of  receipts. . 

♦$58,666,361 

Total 

...  $49,541,309 

$669,662,124 

^Excess  of  expenditures. 


United  States  Public  Debt. 


April  1, 1908. 

May  1,  1908. 

June  1, 1908. 

July  J,  1908. 

Interest- bearing  debt ; 

Consols  of  1900, 2 per  cent 

Loan  of  1925, 4 uer  cent 

Loan  of  1908-1918, 3 per  cent 

Panama  Canal  Ijoan  of  1916,  2 percent 

Certificates  of  Indebtedness  1906 

Total  interest-bearing  debt 

Debt  on  which  interest  has  ceased 

Debt  bearing  no  interest; 

Legal  tender  and  old  demand  notes. 

National  bank  note  redemption  aoct 

Fractional  currency 

Total  non-interest  bearing  debt 

Total  interest  and  non-interest  debt 

Certificates  and  notes  offset  by  cash  in  the 
Treasury; 

Gold  certificates. 

9Uver  certificates 

Treasury  notes  of  1890 

Total  certificates  and  notes 

Aggregate  debt 

Cash  in  the  Treasury : 

Total  cash  assets 

Demand  liabilities. 

Balance 

$646,250,150 

118.489.900 

63,946,460 

64,681.980 

14,186,100 

$646,250,150 

118.489,900 

68.945,460 

54,631.960 

14,166,500 

$646,250,160 

118.489,900 

63,945,460 

64.631,980 

14,186.500 

$6460250,160 

118,480,900 

63,945.460 

54,631,980 

14,186,500 

$807,568,990 

4,675,216 

346.784,208 

66,658,189 

6,862,884 

$897,508,990 

4,500,695 

846,784,298 

71,162,425 

6,862.814 

$897,508,990 

40291,305 

846,784.298 

71,879,462 

6.862,814 

$897,503,990 

4.180,015 

846,784,298 

72,469,284 

6,862,814 

$420,150,321 

1,322,329,527 

835,010,869 

453.048.010 

5,240,000 

$424,?59,£87 

1,326,764,228 

846,918,869 

463,778,000 

6,162,000 

$425,476,575 

1,3270271,870 

825.730,869 

474.054,000 

6,070,000 

$428,056,397 

1,327.690,402 

819,783.869 

474,350,000 

4.982,000 

$1,292,298,869 

2.614,628,396 

1,825.868,700 

1,413.260,510 

$1,815,840,869 

2,642.605.062 

1,839.050,86 

1,437,453,373 

$1,304,854,869 
2,632,1 2tt,7£9 , 

1.817,636.025 
1,426,702,769  1 

$1,299,115,869 

2,626,806,271 

1,807,352.855 

1,417,794,862 

$412,608,190 

150,000.000 

262,608,190 

$401,596,987 

150,000,000 

251,696.987 

$390,933,255  | 
150,000,000  : 
240,933,254  | 

$389,557,998 
I 150,000.000 
239,557,998 

Gold  reserve 

Net  cash  balance 

Total 

$412,608,103 

909,721,397 

$401,596,087 

925,167,236 

$390,933,255 

936,338,615 

$889,557,993 

938,132,409 

Total  debt,  less  cash  in  the  Treasury 

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132 


THE  BANKERS  MAGAZINE, 


United  States  Public  Debt. — There  were 
no  important  changes  in  the  public  debt 
statement  last  month.  The  total  debt  less 
cash  in  the  Treasury  increased  about  $1,- 
800,000,  while  the  net  cash  balance  was 
reduced  about  .$1,400,000.  The  retirement 
of  nearly  $6,000,000  of  gold  certificates  in 
June  was  the  only  other  change  that  might 
attract  notice.  The  gross  assets  were  re- 
duced $10,000  but  the  demand  liabilities 
were  also  reduced  $9,000,000. 

Money  in  Circulation  in  the  United 
States. — The  volume  of  circulation  in- 
creased $9,000,000  in  June,  gold  coin  de- 
creasing $4,000,000  while  gold  certificates 
increased  $4,700,000,  silver  certificates  in- 
creased nearly  $9,000,000,  and  United  States 


notes  $5,000,000  while  national  bank  notes 
decreased  $5,000,000. 

Money  in  the  United  States  Treas- 
ury.— The  total  money  in  the  United  States 
Treasury  increased  during  the  month  $7,- 
500,000  while  outstanding  certificates  were 
increased  $13,500,000,  leaving  a loss  of  $6,- 
000,000  in  net  cash.  The  net  silver  dollars 
and  certificates  in  the  Treasury  were  re- 
duced $7,000,000. 

Supply  of  Money  in  the  United  States. 
— An  increase  of  $3,000,000  in  the  total 
stock  of  money  in  the  country  is  reported 
for  the  month  of  June.  There  was  prac- 
tically no  increase  in  gold  and  a small  re- 
duction in  national  bank  notes.  The  source 
of  increase  was  fractional  silver,  of  which 
$3,100,000  was  coined  in  June. 


Money  in  Circulation  in  the  United  States. 


April  1,  1908. 

May  2,  1908.  | June  2,  1908. 

July  2, 1908. 

Gold  coin 

Silver  dollars 

Subsidiary  silver 

Gold  certificates 

Silver  certificates 

Treasury  notes,' Act  July  14, 1800. 

United  States  notes 

National  bank  notes 

Total 

Population  of  United  8tates 

Circulation  per  capita 

$029,782,706 

83,606,986 

126,034,160 

808,840.829 

488.181,217 

6.226,744 

888.618,809 

666,825,794 

$628,168,888 

80,760,894 

124,541,160 

817,326,479 

446,257,981 

5.139.265 

836,281,579 

647,878,855 

$618,620,761 
78.108,881  1 
121,882.862 
783,708,489 
456.668.484 
5,058.899 
885.192.274 
687,452,199 

76,854.038 

122,012.990 

78K.464A06 

466,581.977 

4.168.084 

840.189,888 

682,481,580 

$8,080,460,734 

87,140,000 

$86.85 

$8,086  294.101 
87,258.000 
$85.37 

$8,036,182,289 

87.877.000 

$84.75 

$8,046.4*7.289 

87.496,000 

$84.81 

Money  in  the  United  States  Treasury. 

April  2,  1908. 

May  2, 1908. 

June  2, 1908. 

July.  1.1908 . 

Geld  coin  and  bullion 

Silver  dollars 

Subsidiary  silver 

United  States  notes 

National  bank  notes 

Total 

Certificates  and  Treasury  notes,  1890, 
outstanding 

Net  cash  in  Treasury 

$1,012,682,900 

4^4,662.996 

18,452,818 

18.167,707 

40,581,561 

$1,011,098,496 

487,499,588 

20,267.842 

10,449.487 

49,7tt7,848 

$997,808,172 

400,146.651 

22,155,411 

11,488.742 

60,007,818 

$1,001,686,560 

491.896,049 

28,727,808 

6,491,178 

66,902,887 

$l,560,6h7,486 

1,251,747,790 

$1,579,082,706 

1.268,728,725 

$1,582,181,204 

1,245,410,872 

$1,680,682,472 

1,259,014,370 

$817,989,606 

$810,868,981 

$386,750,422 

$880,668,102 

Supply  op  Money  in  the  United  States. 


Mar.  2,  1908. 

April  2, 1908. 

May  2,  1908. 

June  2, 2908. 

July!,  1908. 

Gold  coin  and  bullion 

Silver  dollars 

Subsidiary  silver 

United  8tates  notes. 

National  bank  notes 

Total 

$1,685,818,474 

568.249,982 

143.464.628 

816,681,016 

605.674,519 

$1,642,665,614 

568.249,982 

144,486,468 

846.681,016 

696,407,355 

$1,689,267,884 

568,249.982 

144.809.002 

846,681.016 

697,645,698 

$8,896,658,082 

$1,616,018,938 

668,249.982 

148,538.268 

846,681,010 

698.440,517 

i 

$1,616^20.178 

568,249.982 

146,640.290 

846.681,016 

098.888,917 

$3,389,918,614 

$3,898,390,420 

08,872.982,711  ; 

$8,876,126,891 

Advertisers  In  THE  BANKERS  MAGAZINE  are  assured  of  a bona  fide  cir- 
culation among  Banks,  Bankers,  Capitalists  and  others  In  this  and  foreign 
countries,  at  least  double  that  of  any  other  monthly  banking  publication. 


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igitized  by 


Established  lftlQ 

TT\e 

Rank  of  Pittsburgh 

■-/National  JL  Association  w 
CAPITAL,  $2,400,000  SURPLUS,  $2,800,000 


THIS  bank  was 
organized 
when  Pittsburgh 
was  a village  of 
less  than  5,000  in- 
habitants. Tt  is 
the  oldest  Bank  in 
the  United  States 
West  of  the  Al- 
leghany Moud- 
tains. 


W1TH  re; 

V v source*  of 
over  $25,000,000.00 
and  equipped  foi 
all  branches  of 
modern  banking. 
It  invites  conser- 
vatively managed 
banks  to  designate 
it  as  a reserve  de- 
pository. 


JOSEPH  K.  PAULL,  Viee-Pres. 

WILSON  A.  SHAW,  President 

J M.  llUSSELL.  1st  Asst. Cashier 


W.F.  BICK  EL,  Cashier 
J D.  A VUES.  Asst.  Cashier 


iFraukltu  National  Sank 


$1,000,000 

<§> 

Surplus, 

$2,000,000 


President 

j.  r McAllister 

Vice-President 
J.  A.  HARRIS,  Jr. 
Cashier 

E.  P.  PASSMORE 
Assistant  Cashier 
C.  V.  THACKARA 
Assistant  Cashier 
L.  H.  SHRICLEY 
Foreign  Ex.  Dept. 
WILLIAM  WRIGHT 
Manager 


Invites  the  Accounts  of  Banks,  Bankers,  Corporations,  Mercantile 
Firms  and  Individuals 

Traveler*’  Letter*  of  Credit  and  Commercial  Credit*  l*«ned. 

Foreign  Exchange  In  nil  it*  Branchen. 


WILLIAM  H.  BARNES 
SAMUEL  T.  BODINE 
JAMES  C.  BROOKS 
JOHN  H CONVERSE 
THOMAS  DI  WITT  f’UYLEK 
JOSEPH  O.  DARLINUTON 
GEORGE  H.  FRAZIER 


DIRECTORS 
WILLIAM  F.  HARRITY 
WILLIAM  H.  JENKS 
EDWARD  B.  SMITH 
HENRY  TATNALL 
LEVI  C.  WEIR 
PERCY  C.  MADEIRA 
ELLIS  P.  PASSMORE 
J.  A.  HARRIS.  Jr. 


HENRY  ROGERS  WINTHROP 
J RUTHERFORD  MCALLISTER 
FREDERICK  L.  BAILY 
EFFINGHAM  B.  MORRIS 
EDWARD  T.  STOTESBURY 
HENRY  C.  FRICK 
JOHN  B.  THAYER 





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BANKING  AND  FINANCIAL 
NOTES 


NEW  YORK  CITY. 

— When  the  Williamsburg  Trust  Company 
of  Brooklyn,  closed  since  last  October, 
opened  on  June  8,  Gen.  Brayton  Ives,  the 
new  president,  said: 

We  are  open  to  do  business  on  a business 
basis.  There  is  not  a trust  company  in  the 
city  to-day  that  has  as  much  money  behind 
it  as  the  Williamsburg. 

There  was  a big  rush  of  depositors  at 
the  Bridge  Plaza  branch  when  the  doors 
were  opened,  but  there  was  no  excitement 
and  business  was  conducted  as  if  the  bank- 
ing institution  had  never  been  closed. 

At  the  other  branches,  there  were  long 
lines  of  depositors  and  the  banking  rooms 
were  decorated  with  floral  offerings  sent 
by  friends  of  the  company. 

Gen.  Brayton  Ives  is  the  new  president 
of  the  company;  the  first  vice-president  is 
Jacob  C.  Klinck  and  the  secretary  is  S. 
H.  Hurdman. 

— Another  Brooklyn  bank,  the  Home  Bank 
at  Fifth  avenue  and  Forty-eighth  street, 
was  re-opened  June  11,  having  been  closed 
since  February  1. 

William  E.  Kay,  the  new  president  and 
the  other  officers  declared  the  first  day’s 
business  was  highly  gratifying  and  the  fu- 
ture success  of  the  institution  seemed 
assured. 

New  deposits  came  in  steadily  while 
only  a few  depositors  availed  themselves 
of  the  ten  per  cent,  agreement. 

— Lieut.  J.  Paul  Caswell  of  Brooklyn,  who 
figured  several  years  ago  in  a romantic 
marriage  with  Miss  Helen  Chalkiadi  of 
White  Plains,  is  on  his  way  from  Manila 
to  become  assistant  manager  of  the  United 
States  and  Mexico  Trust  Company  in  Mexico 
in  Mexico  City.  He  has  resigned  as  a mem- 
ber of  the  Philippine  constabulary. 


— At  a meeting  of  the  directors  of  the 
Corn  Exchange  Bank,  held  June  8,  J.  P. 
Dunning,  manager  of  the  Fifth  avenue 
branch  of  the  bank,  was  appointed  vice- 
president. 

— The  Commercial  Trust  Company  has 
moved  into  its  new  offices,  which  occupy  the 
whole  of  the  ground  floor  of  the  new  build- 
ing on  Forty-first  street,  from  Broadway 
to  Seventh  avenue.  The  rooms  are  light  and 
airy,  and  are  finished  in  white  marble.  A 
handsome  bronze  railing  incloses  the  cages 
of  the  tellers  and  other  officers.  A room 
is  provided  for  women  clients. 

In  the  gallery  on  the  Seventh  avenue  side 
are  situated  the  private  offices  of  the  presi- 
dent and  the  board  room.  The  latter  is 
a large,  handsome  room,  paneled  in  ma- 
hogany, with  a fine  carved  marble  fireplace. 
The  desks  of  the  officers  are  arranged  be- 
hind a marble  barrier  at  the  Broadway  end 
of  the  building.  Close  by  is  the  entrance 
to  the  safety  deposit  vaults,  which  will  be 
ready  for  business  in  a fortnight. 

The  trust  company  was  organized  in  No- 
vember, 1906,  and  had  its  first  office  at 
Broadway  and  Thirty-seventh  street.  Its 
officers  are:  R.  R.  Moore,  president;  G.  J. 
Baumann,  vice-president,  and  Ames  Hig- 
gins, secretary. 

— A quarterly  dividend  of  two  and  one- 
half  per  cent.,  which  was  payable  July  1, 
has  been  declared  by  directors  of  the  Coal 
and  Iron  National  Bank.  This  is  an  in- 
crease of  one  per  cent,  on  the  quarterly  rate 
and  puts  this  stock  on  a ten  per  cent, 
basis.  The  Coal  and  Iron  National  Bank, 
organized  a little  over  four  years  ago,  has 
met  with  success  from  the  start  and  earned 
last  year  in  the  neighborhood  of  twenty-five 


Merchants  National  Bank 

1 

Bank  and  Trust  Company 
AUDITING  and  COUNSELLING 

RICHMOND.  VA. 

1 

By  a thoroughly  trained  and  broadly 

Capital $200,000 

■ 

experienced  Banker.  Practical 

Surplus  and  Profits,  830,000 

■ 

comprehensive  results. 

Best  Facilities  for  Handling  Items  on  the  Vir- 
ginias and  Oarolinas 

1 

L.  L DOUBLEDAY,  Milwaukee,  Wis. 

THE  BANKERS  MAGAZINE. 


134 


Capital 

and 

Surplus 


Broadway 

and 

Cedar  Street 

NewYork 


WILLARD  V.  KING,  President 

W'M.  H.  NICHOLS,  Vice-President 

HOWARD  BAYNE,  Vice- Pres.  & Treats. 
LANGLEY  W.  WIGGIN,  Secretary 

EDWIN  B.  POTTS,  Assistant  Secretary 
PARK  TERRELL,  Mgr.  Bond  Dept. 
DAVID  S.  MILLS,  Trust  Officer 


Municipal  Bonds  should  offer  to  In- 
vestors the  safest  form  of  invest- 
ment. 

Our  method  of  issue  affords  practi- 
cal protection  against  over-issues 
and  forgeries. 

A descriptive  pamphlet  will  be 
mailed  on  request. 


INDEPENDENT  OF  THE  CONTROL 
OF  ANY  SINGLE  INTEREST 


per  cent,  on  its  capital  shares.  It  has 
$.500,000  capital,  $.500,000  surplus  (of  which 
$80,000  is  earned)  and  about  $200,000  un- 
divided profits. 

Since  last  Octolier  this  bank  has  opened 
over  seven  hundred  new  mercantile  accounts. 

— The  National  City  Bank  will  this  year 
pay  taxes  on  the  old  custom  house  property 
on  a valuation  of  $4,000,000.  The  property 
was  assessed  at  $5,500,000,  but  the  bank 
had  this  amount  reduced  by  $1,500,000.  The 
bank  has  never  taken  title  to  the  property 
nor  paid  taxes  thereon  since  it  purchased 
it  from  the  Government  nine  years  ago. 

— Louis  H.  Halloway,  formerly  cashier  of 
the  Nineteenth  Ward  Bank  and  more  re- 
cently the  vice-president  and  manager  of 
the  Madison  avrnue  branch  of  the  Mechan- 
ics and  Traders’  Bank,  has  been  elected  a 
vice-president  and  director  of  the  Hudson 
Trust  Co. 

— Stockholders  of  the  Mechanics  and 
Traders  Bank,  who  are  working  on  a de- 
ferred payment  plan  with  the  intention  of 
re-opening  the  bank,  have  selected  Edward 
M.  Grout,  formerly  controller  of  the  city, 
to  be  president. 

The  receivers  now  have  in  hand  nearly 
$2,500,000  and  have  arranged  to  secure  ad- 
ditional cash  to  insure  its  successful  opera- 
tion. 

Eighty-two  per  cent,  of  the  depositors 
have  signed  the  agreement  and  an  effort 
will  be  made  to  increase  this  number  to 
ninety  per  cent,  as  required  by  the  Super- 
intendent of  Banks. 


— Heretofore  the  expenses  involved  in 
bank  receiverships  have  been  scandalously 
great,  but  the  recent  legislation  has  worked 
winders.  Under  the  new'  system  the  cost 
of  the  receivership  of  the  Home  Bank  of 
Brooklyn,  covering  a period  of  forty-two 
days,  was  only  $666. 

— A particularly  good  feature  of  the  June 
17  statement  of  the  Home  Trust  Company 
of  New  York  is  the  item  of  surplus  and 
undivided  profits,  which  amounts  to  $285,- 
172.10 — practically  equal  to  one-third  of  the 
company’s  capital  stock  of  $750,000. 

The  entire  statement  is  a very  satisfac- 
tory one,  showing  the  total  resources  of  the 
company  to  be  $2,576,332.42. 


CHAS.  W.  RIECKS. 

— Chas.  W.  Riecks,  who  is  vice-president 
of  the  Liberty  National  Bank,  is  now  filling 
the  office  of  both  vice-president  and  cashier. 

— George  N.  Hartmann  has  been  elected 
secretary’  of  the  Metropolitan  Trust  Co.  to 
succeed  Jacob  C.  Klinck,  who  was  made 
first  vice-president  of  the  Williamsburgh 
Trust  Co. 

The  Metropolitan  Trust  Co.  has  assets 
of  $25,536,253 ; cash  on  hand  and  in  banks 
$4,434,103.  Its  capital  is  $2,000,000  and 
surplus,  $7,000,000. 


Merchants  national  Bank 

RICHMOND.  VA. 

Capital,  S 200,000 

Surplus  ft  Profits,  830,000 

Largest  Depository  for  Bank*  between 
Baltimore  and  New  Orleans 


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(JONES  PERPETUAL  LEDGER  CO.) 

CHICACO 

NEW  YORK 

—At  the  George  Washington  University 
commencement  held  at  Washington  June  3, 
the  degree  of  doctor  of  law  was  conferred 
on  Willis  S.  Paine,  president  of  the  Con- 
solidated National  Bank  of  New  York,  in 
recognition  of  bis  several  works  on  bank- 
ing. 

— William  A.  Law,  vice-president  of  the 
Merchants*  National  Bank,  has  been  ap- 
pointed a member  of  the  American  Bank- 
ers’ Association  committtce  to  devise  reg- 
ulation looking  to  more  strict  supervision 
of  commercial  paper  offered  for  discount. 

—It  is  reported  that  the  new  Peoples’ 
National  Bank  of  Brooklyn  will  be  estab- 
lished in  the  near  future  on  Broadway  be- 
tween Gates  avenue  and  Quincy  street.  The 
present  tenants  occupying  two  adjoining 
storerooms  will  vacate  and  the  quarters  will 
be  remodeled  into  one  large  banking  room 
suited  to  the  bank’s  needs. 

The  organisers  of  the  Peoples’  National 
have  received  the  hearty  co-operation  of 
Brooklyn  business  men  in  the  Bushwick  sec- 
tion. and  as  their’s  will  be  the  only  national 
bank  within  a radius  of  two  miles,  its 
future  success  seems  assured. 

—On  June  15,  the  Lafayette  Trust  Co., 
formerly  the  Jenkins  Trust  Co.  of  Brook- 
lyn, anticipated  the  payment  of  the  third 
instalment  of  ten  per  cent,  due  depositors 
July  15. 

—Charles  A.  Hana,  receiver  of  the  Na- 
tional Bank  of  North  America,  under  a 
judgment  given  recently  in  the  United 
States  Circuit  Court,  recovers  possession  of 
1000  shares  of  Chase  National  Bank  stock 
which  had  been  pledged  by  Charles  W. 
Morse  with  the  Metropolitan  Trust  Co.  for 
a loan  of  $150,000.  Mr.  Hana  contends  that 
the  loan  was  made  originally  in  the  interest 
of  the  bank,  but  Mr.  Morse  maintained  on 
the  stand  that  the  stock  belonged  to  him. 
The  bank  will  now  receive  the  stock  upon 
the  pavment  of  face  of  the  loan  and  interest 
and  it’  will  make  about  $80,000  thereby. 


— In  order  to  comply  with  the  new  law 
compelling  them  to  hold  ten  per  cent,  cash 
reserve  by  July  1,  the  local  trust  com- 
panies have  withdrawn  fully  $20,000,000 
from  the  banks. 

As  the  clearing-house  banks  last  month 
held  a cash  reserve  of  $375,705,400,  the  high 
record,  they  were  able  to  supply  the  trust 
companies  with  cash  without  disturbing  the 
money  market. 

The  terms  of  the  new  law  call  for  fifteen 
per  cent,  cash  reserve  on  all  deposits  held  by 
a trust  company,  “exclusive  of  moneys  held 
by  it  in  trust,  which  are  not  made  payable 
under  the  conditions  of  the  trust  within 
thirty  days,  and  also  exclusive  of  time  de- 
posits not  payable  within  thirty  days,  rep- 
resented by  certificates  showing  the  amount 
of  the  deposit,  the  date  of  issue,  and  the 
date  when  due,  and  also  exclusive  of  de- 
posits which  are  secured  by  outstanding  un- 
matured bonds  issued  by  the  State  of  New 
York.” 

— At  a meeting  at  the  clearing-house 
June  12,  the  National  Copper  Bank,  of 
which  Charles  H.  Sabin  is  president  and 
whose  directorate  includes  a number  of 
the  prominent  men  connected  with  the 
Standard  Oil  Company  and  the  Amalga- 
mated Copper  Company,  was  admitted  to 
membership  in  the  clearing-house  associa- 
tion. The  bank  was  organized  a little  over 
a year  ago,  and  in  that  time  has  built  up  its 
business  to  the  point  where  it  has  deposits 
amounting  to  more  than  $17,000,000. 

The  admission  of  the  bank  to  the  clear- 
ing-house brings  the  membership  up  to 


Merchants  National  Bank 

RICHMOND,  VA. 

Capital,  - - $200,000 

Surplus  & Profits,  830,000 

Vtrginta  *s  Most  Successful  Nat  ions  l Bank 
COLLECTIONS  CAREFULLY  ROUTED 


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136 


THE  BANKERS  MAGAZINE. 


forty-nine.  Before  the  October  panic  last 
year,  there  were  fifty-two  members  of  the 
association. 

A number  of  changes  were  mgde  in  the 
constitution  of  the  clearing-house  at  the 
meeting,  but  as  was  explained  by  president 
Gilbert,  they  were  without  significance,  be- 
ing merely  in  effect  a codification  of  the 
numerous  amendments  which  have  been  made 
from  time  to  time  in  the  past. 

—A  new  Stock  Exchange  firm  which  began 
business  June  15,  under  the  title  of  Jerome 
J.  Danzig  & Co.,  consists  of  Jerome  J. 
Danzig  and  J.  Ainslie  Bear.  The  firm  will 
occupy  the  fourth  floor  of  1 Nassau  street, 
and  will  have  a branch  office  at  529  Broad- 
way under  the  management  of  Frank  G. 
Smith.  Mr.  Danzig  has  been  an  active 
member  of  the  Stock  Exchange  for  nearly 
ten  years. 

—Depositors  of  the  New  Amsterdam 
Bank,  one  of  the  so-called  Morse  banks 
which  went  into  the  hands  of  a receiver, 
have  received  their  first  dividend  of  twenty- 
five  per  cent.  Eventually  the  depositors  will 
receive  all  their  money. 

— Rare  United  States  pattern  coins 
brought  high  prices  at  the  second  day's 
sale  of  the  Gschwend  coin  collection,  held 
by  Thomas  L.  Elder  at  the  Collectors’  Club 
recently.  Although  struck  in  copper,  in- 
stead of  in  the  gold  or  silver  of  the  regular 
coins  made  for  circulation,  these  pieces 
brought  sums  far  above  their  weight  in  gold. 

A dollar  in  copper,  dated  1836,  showing 
a flying  eagle  on  the  reverse,  engraved  by 
Mint  Engraver  Gobrecht,  but  never  issued 
for  general  use,  was  bid  in  for  $37.  Another 
of  1838,  also  in  copper,  with  the  engraver’s 
name  under  the  figure  of  Liberty,  brought 
$40.  Still  another,  dated  1839,  showing 
twenty-six  stars  surrounding  the  flying 
eagle,  brought  $49.  A set  of  six  pattern 
trade  dollars,  dated  1873,  sold  for  $20. 

— The  Chatham  National  Bank  has  pur- 
chased the  building  which  it  now  occupies 
at  Broadway  and  John  street.  This  will 
give  the  bank  a permanent  location  on  the 
site  which  it  has  occupied  since  1860. 

The  first  site  of  the  Chatham  Bank,  as 
it  was  then  called,  was  in  Chatham  street, 
from  which  it  derived  its  name.  . It  was 
organized  in  1851  as  a state  institution,  and 
became  nationalized  in  1865.  The  bank  has 
remained  continuously  in  the  hands  of  the 
same  interests  since  George  M.  Hard  became 
its  president,  forty-three  years  ago.  Its 
present  capital  of  $450,000  is  the  same  as 
when  the  bank  was  started, 

On  July  1 the  directors  paid  the  regular 
quarterly  dividend  of  4 per  cent.,  which 
is  the  150th  dividend  paid  since  1852. 


•Nero  fEttglaith 
National  lank 

BOSTON,  MASS. 

A"  especially  safe  and 

desirable  depository  for 
the  funds  of  Savings  banks 
on  which  a satisfactory 
rate  of  interest 'Mil  be  paid 

Capital  and  Surplus,  $1,900,000 


— The  loans  of  some  of  the  great  banks  of 
the  world  at  recent  dates  as  compared  with 
a year  ago  are  as  follows: 


1908  1907 

New  York  $1,213,866,600  $1,139,755,900 

Germany  248,000.000  265,000,000 

France  172,000,000  196,000,000 

Austria 105.000,000  160,000,000 

Belgium  117,000.000  124,000,000 

Philadelphia  227,027.000  225,765,000 


— Vice-President  James  G.  Cannon,  of  the 
Fourth  National  Bank,  has  been  elected 
president  of  Group  8 of  the  New  York  State 
Banking  Association;  B.  H.  Faneher,  of 
the  Fifth  Avenue  Bank,  was  elected  secre- 
tary, and  the  following  executive  commit- 
tee was  elected:  President,  W.  H.  Porter,  of 
the  Chemical  National  Bank;  vice-presidents, 
Horace  M.  Kilborn,  of  the  National  City 
Bank;  H.  P.  Davison,  of  the  First  National; 
E.  H.  Ferry,  of  the  Hanover  National; 
Gates  McGarrah,  of  the  Mechanics’  Nation- 
al; Albert  H.  Wiggin,  of  the  Chase  National, 
and  Z.  S.  Freeman,  of  the  Merchants’  Na- 
tional. 

— The  Brooklyn  Bank,  after  having  been 
closed  since  the  panic  last  fall,  opened  the 
doors  of  its  two  offices  in  Fulton  street, 
Brooklyn,  at  noon,  June  23.  It  re-opened 
under  the  most  favorable  circumstances, 
having  been  thoroughly  reorganized  in  the 
meantime  and  put  on  a most  substantial 
basis.  The  bank  has  $400,000  in  cash  over 
and  above  its  deposits  in  its  vaults  sufficient 
to  pay  95  per  cent,  of  all  its  obligations, 
and  has  a capital  and  surplus  of  $715,000, 
instead  of  $300,000,  as  under  the  old  re- 
gime. Daniel  O.  Underhill,  formerly  of 
the  Fourth  National  Bank,  is  the  new 
president,  and  the  other  officers  and  di- 
rectors are:  Nelson  G.  Ayres,  vice-president 
and  cashier;  Willett  G.  Rendell,  assistant 
cashier. 

All  of  the  old  officers  and  directors  sent 
in  their  resignations  and  these  were  ac- 
cepted with  the  exception  of  that  of  Lud- 


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BANKING  AND  FINANCIAL  NOTES. 


137 


wig  Xissen,  who  is  retained  in  the  new 
board.  As  far  as  possible  the  old  clerical 
force  has  been  retained.  In  the  near  fu- 
ture the  bank  will  occupy  the  new  triangu- 
lar building  at  the  corner  of  Fulton  street 
and  Flatbush  avenue,  which  will  become 
the  main  office. 

Under  the  reorganization  plan  the  bank 
will  pay  its  depositors  dollar  for  dollar  and 
is  prepared  to  pay  off  immediately  any  or 
all  on  demand.  There  are  no  deferred  pay- 
ments. Furthermore,  it  proposes  to  pay  in- 
terest on  all  deposits,  where  an  agreement 
existed,  the  same  to  cover  the  period  of 
suspension.  The  officers  of  the  bank  are 
particularly  proud  of  the  fact  that  it  is  the 
only  institution  of  those  which  closed  their 
doors  in  the  panic  last  fall  that  re-opened 
with  an  increased  capital.  In  fact,  it  re- 
opened with  caoital  and  surplus  double  the 
amount  with  which  it  closed.  It  has  $1,800,- 
000  cash  on  hand  and  in  bank  and  $250,000 
in  gilt  edged  securities.*  The  bank  owes  its 
depositors  $1,500,000. 

When  the  doors  were  thrown  open  there 
was  no  rush  of  depositors  to  withdraw  their 
deposits;  in  fact,  less  than  a score  of  per- 
sons were  on  hand,  and  in  the  first  half 
hour  the  deposits  were  larger  than  the 
withdrawals. 

There  was  great  jubilation  attending  the 
re-opening.  The  main  office,  corner  of  Ful- 
ton and  Clinton  streets,  was  gorgeously 
decorated,  the  entire  front  of  the  building 
having  been  draped  with  American  flags 
and  emblems.  Within  there  was  a superb 
display  of  flowers  which  friends  had  sent 
with  their  best  wishes,  and  scores  of  tele- 
grams of  congratulation  poured  in  from  all 
sides. 

The  Brooklyn  Bank,  which  is  the  oldest 
bank  in  Brooklyn,  was  one  of  the  institu- 
tions which  William  Gow  proposed  to 
merge,  along  with  the  Borough  Bank,  into 
the  International  Trust  Company.  It  was 
considered  one  of  the  soundest  and  most 
conservative  of  the  banking  institutions 
in  the  borough.  The  bank  has  been  closed 
since  October  2i. 

— All  the  savings  banks  of  New  York 
city,  with  but  one  exception,  allowed  inter- 
est at  the  rate  of  four  per  cent,  per  annum 
on  all  amounts  for  this  half-year  which 
ended  June  30.  Six  of  them  are  banks 
which  allowed  three  and  one-half  and  four 
per  cent,  the  previous  half-year,  one  allowed 
three,  three  and  one-half,  and  four  per  cent, 
and  one  three  and  one-half  per  cent,  on  all 
amounts.  One  bank  will  pay  three  and  one- 
half  per  cent.,  as  against  four  per  cent,  the 
previous  half-year. 

The  savings  banks  of  this  city  have  grad- 
ually been  working  towards  a general  four 
per  cent,  interest  allowance  on  deposits. 
The  fact  that  this  result  has  now  been  prac- 


tically obtained  speaks  well  for  their  busi- 
ness during  the  past  six  months,  notwith- 
standing that  during  a part  of  that  time 
savings  banks  were,  to  a certain  extent, 
under  the  same  ban  of  suspicion  and  dis- 
trust from  which  the  general  banking  com- 
munity suffered. 

The  advance  in  mortgage  rates  has  con- 
tributed to  their  earnings  this  year  and 
made  possible  the  general  four  per  cent,  in- 
terest rate. 

— Charles  E.  Dickinson,  president  of  the 
Carnegie  Trust  Company,  was  entertained 
at  dinner  June  10  in  the  new  Railroad 
Club,  30  Church  street,  by  about  one  hun- 
dred of  the  employes  and  officers  of  the 
company  and  the  Carnegie  Safe  Deposit 
Company. 

The  dinner  was  informal  and  largely  in 
the  nature  of  a celebration  of  the  opening 
of  the  safe  deposit  company’s  new  vaults 
in  the  Trinity  building,  115  Broadway.  But 
the  employees  also  wanted  to  show  their 
good  feeling  for  their  president. 

Brief  speeches  were  made  by  president 
Dickinson,  Francis  H.  Kimball,  the  archi- 
tect; toastmaster  Robert  L.  Smith,  Rob- 
ert B.  Moorehead,  an  officer  of  the  trust 
company;  vice-president  Frederick  H.  Par- 
ker, and  Robert  L.  Anderson  of  the  trust 
company. 

— Among  the  new  directors  chosen  for 
the  Carnegie  Trust  Co.,  are  many  prom- 
inent men  from  the  interior,  including  Fred- 
erick Weyerhauser  of  St.  Paul,  the  richest 
man  in  the  Northwest;  Solomon  Wexler, 


American  National  Bank 

AMERICAN  BANK  BUILDING. 
RICHMOND,  VA. 


CAPITAL  - $400,000.00 

SURPLUS  - 180,000.00 

We  retain  In  our  flies  accurate  infor- 
mation concerning  outgoing  mails  and 
express,  thereby  enabling  us  to  make 
currency  shipments  to  our  correspond- 
ents with  the  greatest  dispatch. 


OFFICERS  : 

OLIVER  J.  SANDS,  President 
CHAS.  E.  WINQO,  Vice- President 
O.  BAYLOR  HILL,  Cashier 
WALLER  HOLLADAY,  Asst.  CashV 
WM.  C.  CAMP,  Vice-President 

4 


Digitized  by  t^ooole 


Ordinary  business  prudence  should  dictate  that  your 
issue  of  securities  be  engraved  by  a responsible  bank 
note  company. 

In  no  other  way  can  proper  protection  be  obtained 
during  the  different  stages  of  preparation  as  well  as 
in  the  subsequent  guarding  of  plates  from  which  the 
work  is  produced. 

We  have  been  making  plates  and  keeping  them  for 
over  a century. 

American  Bank  Mote  Company 

Broad  and  Beaver  Streets , Me  tv  York 

BOSTON  PHILADELPHIA  BALTIMORE  ATLANTA 

PITTSBURG  ST.  LOUIS  SAN  FRANCISCO 


vice-president  of  the  Whitney  Central  Na- 
tional Bank  of  New  Orleans;  George  C. 
Smith  of  Pittsburg,  John  Sherwin,  presi- 
dent of  the  First  National  Bank  of  Cleve- 
land; Alexander  McDonald,  the  Standard 
Oil  man  of  Cincinnati;  James  W.  Lusk, 
president  of  the  National  German- American 
Bank  of  St.  Paul;  David  It.  Francis  of  St. 
Louis,  formerly  Governor  of  Missouri,  and 
Adolphus  Busch  of  St.  Louis. 

Other  new  directors  are  Alden  Anderson, 
Sacramento,  Cal.;  William  J.  Cummings, 
Nashville;  Newman  Erie,  the  well  known 
railroad  man;  David  Homer  Bates  of  this 
city  and  Liston  L.  Lewi?,  J.  J.  Spaulding 
and  John  B.  Stanchfield,  lawyers,  of  this 
city.  These  retiring  directors  were  re- 
elected: Anson  W.  Burchard,  A.  B.  Chand- 
ler, James  Ross  Curran,  Frank  L.  Grant, 
William  P.  Harding,  William  A.  Keever, 
Frederick  Lewisohn,  Alton  B.  Parker, 
George  E.  Roberts,  J.  G.  Robin,  Jacob 
Ruppert,  Jr.,  Charles  M.  Schwab,  James 
Talcott  and  Edgar  Van  Etten. 

— Arthur  King  Wood,  who  was  formerly 
vice-president  of  the  Van  Nordcn  Trust 
Company,  has  been  elected  president  of 
the  Franklin  Trust  Company  of  Brooklyn. 
He  succeeds  George  H.  Southard,  who  re- 
signed recently  on  account  of  ill  health. 

— Since  March  25,  when  fifty-eight  state 
banks  reported  their  condition  in  response 

13S 


to  the  State  Superintendent’s  call,  there 
has  been  an  increase  of  $24,000,000  in  de- 
posits, while  loans  and  discounts  have  in- 
creased $11,000,000.  This  interesting  in- 
formation appeared  in  the  compilation  made 
by  the  New  York  Clearing-House  for  the 
use  of  its  members. 

— The  banking  group,  consisting  of  Kuhn, 
Loeb  & Co.,  Speyer  & Co.,  Ladenburg, 
Thalmann  & Co.  and  Hallgarten  & Co.,  in 
charge  of  the  Mexican  Railroad  merger, 
has  definitely  closed  a negotiation  covering 
about  $30,000,000  National  Railways  of  Mex- 
ico four  per  cent,  general  mortgage  bonds, 
guaranteed  by . the  Mexican  Government, 
with  a group  of  leading  French  bankers. 

Proceeds  of  the  sale  of  the  bonds  are  to 
be  devoted  to  improvements  and  extension 
work  on  the  two  railroads  which  ivere  con- 
solidated under  the  control  of  the  Mexican 
Government,  the  Mexican  Central  and  the 
National  Railroad  of  Mexico. 

The  readjustment  managers  of  the  great 
Mexican  Railroad  merger  have  received  sev- 
eral assignments  of  the  securities  of  the 
big  railroads  held  by  foreign  investors  who 
sent  the  bonds  and  stock  on  to  New  York, 
where  the  exchange  of  securities  is  now 
taking  place. 

— An  excellent  report  was  submitted  by 
the  Columbia  Trust  Company  on  June  17, 
the  date  of  the  last  official  call. 


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139 


With  a capital  of  $1,000,000,  and  resources 
of  $9,378,052  behind  it,  this  company  by 
reason  of  the  very  excellent  way  in  which 
it  has  been  managed,  now  ranks  among  the 
foremost  of  the  metropolis. 

NEW  ENGLAND  STATES. 

— Boston  banks  were  closed  on  June  17 
to  commemorate  “Bunker  Hill  Day.”  There 
was  also  no  session  of  the  stock  exchange  on 
that  date. 

— William  S.  B.  Stevens  has  been  chosen 
to  succeed  George  H.  Perkins,  resigned,  as 
cashier  of  the  National  L'nion  Bank  of  Bos- 
ton. Mr.  Stevens  had  held  the  post  of 
assistant  cashier. 

— As  a result  of  the  recent  purchase  of 
600  shares,  the  control  of  the  Medford  Na- 
tional Bank  of  Boston  has  passed  from 
president  Charles  H.  Sawyer  to  new  in- 
terests, who  are  represented  by  the  law  firm 
of  Eaton  & McKnight.  A successor  to  Mr. 
Sawyer  as  president  has  not  yet  been  se- 
lected. 

Application  for  a charter  to  change  the 
bank  into  a trust  company  will  shortly  be 
made  to  the  secretary  of  state.  Members 
of  the  Lawrence  family  of  Medford  are  the 
largest  stockholders.  The  bank  was  organ- 
ized in  1900.  The  listed  directors  are: 
Charles  H.  Sawyer,  William  T.  Martin, 
Ixmis  H.  Lovering,  Austin  L.  Baker,  John 
Coulson,  Walter  F Cushing,  Edwin  L.  Mc- 
Knight. 

— Earnings  of  the  twenty-four  Boston 
banks  for  the  twelve  months  ended  May  14 
are  estimated  at  $3,885,135,  or  15.60  per 
cent  on  the  $24,900,000  combined  capital 
stock.  This  compares  with  earnings  of  17.9 
per  cent,  for  the  twelve  months  ended  Aug. 
22,  1907. 

— Charles  P.  Blinn,  Jr.,  the  assistant  treas- 
urer of  the  City  Trust  Co.  of  Boston,  has 
been  elected  vice-president  of  the  National 
Union  Bank.  He  entered  upon  his  active 
duties  in  his  new  position  on  July  1. 

— W.  F.  Burdett  has  been  appointed 
assistant  cashier  of  the  State  National  Bank 
of  Boston. 

— Governor  Higgins  of  Rhode  Island  has 
appointed  William  P.  Goodwin  of  Prov- 
idence State  Bank  Commissioner,  under  the 
new  hanking  act  passed  by  the  legislature 
creating  the  office  and  providing  for  such 
appointment.  The  act,  m addition  to  pro- 
viding for  the  general  regulation  of  banks, 
also  materially  changes  the  law  governing 
the  investments  of  savings  banks. 

— The  annual  meeting  of  the  Holyoke 
Mass.)  Co-operative  Bank  on  June  11,  re- 


sulted in  the  re-election  of  the  old  board  of 
officers.  The  report  of  the  financial  officers 
showed  gratifying  progress  for  the  last 
fiscal  year. 

— Salem,  Mass.,  can  lay  claim  to  the  honor 
of  having  probably  the  youngest  bank  presi- 
dent in  New  England,  and  perhaps  in  the 
country.  He  is  Eugene  J.  Fabens,  presi- 
dent of  the  Naumkeag  National  Bank,  and 
is  only  23. 

He  was  recently  chosen  to  succeed  Ar- 
thur W.  West.  President  Fabens  comes  of 
a well  known  and  prominent  family  of 
Salem.  A representative  of  the  family  has 
been  associated  with  the  Naumkeag  bank- 
ing affairs  since  its  organization. 

Mr.  Fabens,  after  leaving  Stone’s  school  in 
Boston,  became  a salesman  on  the  road  for 
a food  company.  He  was  associated  with 
I^e,  Higginson  & Co.  of  Boston  for  some 
time.  Although  young  in  years  Mr.  Fabens 
has  the  confidence  of  the  business  men  of 
Salem. 

— On  the  evening  of  June  10,  the  first 
annual  meeting  of  the  Massachusetts  Bank- 
ers Association  ever  held  outside  of  Bos- 
ton, opened  at  North  Adams  with  a ban- 
quet at  which  200  members  with  their  wives  * 
were  seated. 

The  entertainment  provided  for  the  early 
part  of  the  evening  was  distributed  between 
the  courses.  Dea  Valmore  A.  Whitaker, 
treasurer  of  the  North  Adams  Savings  Bank, 
former  president  of  the  city  council,  and 
probably  the  oldest  bank  official  present  at 
the  meeting,  the  dean  of  Berkshire  bank 
officials,  welcomed  the  visiting  bankers  and 
their  families  to  the  city. 

Following  the  banquet  the  entire  com- 
pany enjoyed  a grand  ball  for  which  the 
Philharmonic  orchestra  furnished  excellent 
music. 

The  next  morning,  June  11,  at  8.30  o’clock, 
the  bankers  witnessed  a successful  balloon 


GARFIELD 
NATIONAL  BANK 

Masonic  Temple 

23rd  St.  & 6th  Ave. 
NEW  YORK 


CAPITAL,  - - $1,000,000 

SURPLUS,  - - 1,000,000 


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140 


THE  BANKERS  MAGAZINE. 


flight  by  A.  Holland  Forbes  of  New  York 
in  the  North  Adams  No.  1. 

Business  sessions  followed,  including  the 
election  of  officers  and  the  convention  closed 
with  a trolley  ride  to  Bennington,  Vermont, 
and  return. 

— Arthur  D.  Call,  principal  of  the  North 
School  district  in  Hartford,  Conn.,  has 
made  a report  covering  a period  of  sev- 
eral years  showing  the  growing  interest 
taken  in  school  savings  banks. 

He  states  that  the  total  average  number 
of  weekly  depositors  was  twenty-three  the 
first  year  and  thirty-three  last  year.  There 
were  114  depositors  in  the  kindergarten, 
this  number  being  fifty-four  per  cent,  of  the 
enrollment.  Seventy-five  per  cent,  of  the 
children  of  the  school  have  deposited  some- 
thing. The  average  weekly  deposits  for  the 
two  years  was  $121.23,  the  largest  weekly 
deposit  being  $267.43  and  the  smallest 
$56.89.  The  largest  amount  deposited  by 
one  pupil  in  two  years  was  $83,  and  the  total 
deposits  for  the  two  years  were  $6,718.78, 
and  692  bank  books  have  been  issued  by 
the  Society  for  Savings  to  the  children. 

The  system  seems  to  be  working  well  in 
Hartford.  The  theory  of  it  seems  to  be 
all  right,  and  the  notion  that  teachers  have 
not  the  time  to  attend  to  it  is  also  knocked 
out.  At  any  rate,  they  have  found  the 
time  and  managed  in  one  way  or  another  to 
make  the  working  of  the  plan  a notable 
success. 

— The  annual  meeting  of  the  Willimantic 
(Conn.)  Savings  Institute  was  held  June 
15,  and  the  report  of  the  treasurer  shows 
that  the  bank  has  made  a gratifying  gain 
during  the  past  year.  The  officers  of  the  in- 
stitution feel  extremely  pleased  over  the 
showing  made,  the  gain  being  $35,209.68, 
wholly  in  deposits.  The  total  deposits  are 
now  $431,180.28.  The  old  officers  were  re- 
elected, as  follows:  President,  Hugh  C. 

Murray;  vice-n resident  Frank  P.  Webb; 
secretary  and  treasurer,  Noah  D.  Webster; 
directors,  Samuel  L.  Burlingham,  Frank 
Larrabee,  Charles  A.  Capon,  Jeremiah  O'Sul- 
livan and  Homiisdas  Dion. 

— The  doors  of  the  Windsor  Docks  Trust 
and  Safe  Deposit  Company  were  thrown 
open  for  business  June  3 at  the  newly  fitted 
quarters,  comer  of  Main  and  Spring  streets, 
in  Windsor  Docks,  Conn.  The  corporation 
was  organized  in  June  of  last  year  under  a 
charter  granted  by  the  state  legislature  of 
1903.  The  officers  are:  President,  William 
Mather;  vice-president,  John  R.  Montgom- 
ery; secretary  and  treasurer,  Verdine  D. 
Mather. 


WANTED  — S3  Gold  Pieces,  Confederate  cur- 
rency. NELSON  T.  THORSON,  Omaha,  Neb. 


— Taking  advantage  of  the  holiday,  the 
Connecticut  Savings  Bank  of  New  Haven, 
on  May  30,  moved  into  its  new  quarters  at 
the  corner  of  Church  and  Crown  streets. 

The  new  edifice  is  a handsome  addition  to 
the  business  buildings  of  the  city  and  also 
affords  the  Connecticut  pavings  Bank  much 
better  quarters  and  greater  facilities  for  the 
operation  of  its  large  and  increasing  busi- 
ness. Its  exterior  is  of  pure  wliite  marble 
and  the  whole  structure  bears  a resemblance 
to  the  famous  Greek  Parthenon. 

— Costello  Dippitt,  president  of  the  Nor- 
wich Savings  Society  has  been  elected  mayor 
of  the  city  of  Norwich,  Conn. 

— A dividend  of  twenty-five  per  cent,  was 
paid  on  July  3 to  the  depositors  of  the  de- 
funct Jewellers’  National  Bank  of  North 
Attleboro,  Mass. 

— About  the  middle  of  February,  1907, 
it  was  discovered  that  a very  large  amount 
of  railroad  bonds  had  been  stolen  from  the 
Savings  Bank  of  New  Britain,  Conn.,  by 
William  F.  Walker,  its  former  treasurer. 
The  following  is  a list  of  the  securities 
stolen : 

St.  Douis  & Merchants  Bridge  Co.,  1st 
mortgage  bonds,  guaranteed  by  Terminal 
Railroad  Association  of  St.  I/Ouis.  Pay- 
able at  Farmers’  Doan  & Trust  Co.,  New 
York.  Optional  1909.  Definite  1929.  Six 
per  cent.  One  bond,  $1,000,  No.  43. 

Philadelphia,  Harrisburg  & Pittsburg  R. 
R.  Co.,  gold  bonds,  1st  mortgage,  five  per 
cent,  coupon;  due  Oct.  15,  1925.  Interest 
April  and  October  15.  Nos.  309,  311,  312, 
313,  314,  315,  316,  317,  £30,  331,  332,  333, 
334,  357,  358,  359,  360,  361,  409,  410. 

Harlem  River  and  Portchester  bonds,  $10,- 
000.  N.  Y.,  N.  H.  & H.  R.  R.,  1st  mortgage, 
four  per  cent,  gold  bonds,  due  May  1,  1954. 
Interest  payable  May  and  November  1,  at 
Dincoln  National  Bank,  New  York.  Ten 
bonds,  $10,000.  No.  4923,  4924,  4925,  4926, 
4927,  4928,  4929,  4930,  4931,  4932. 

Rochester  & Pittsburg  (B.  R.  & P.) 
Cons.  Mortgage  6’s.  Interest  June  and  De- 
cember, principal  due  1922,  payable  at 
Union  Trust  Co.,  New  York.  Nos.  1753, 
1754,  2765,  2766,  2919,  2920,  3082,  3280, 
3730,  3941,  4893,  4894,  4895,  4896,  4897. 

Chicago,  Milwaukee  & St.  Paul,  Chicago 
& Pacific  Western  Div.,  $1,000  each,  1st 
mortgage,  five  per  cent,  bonds,  gold,  due 
Jan.  1,  1921.  Interest  January  and  July. 
Office  in  New  York.  No.  266,  2782,  2783, 
2809,  3302,  4155,  4321,  5292,  5397,  5752,  6329, 
6467,  6470,  6778,  6996,  7053  7237,  7493,  12789. 
14670,  15878,  16041,  16042,  17530,  17604, 

17857,  19226,  20683,  20754,  21762,  21871, 
23009,  23027,  23272,  24083. 

Chicago  & Eastern  Illinois.  General  Con- 
solidated coupon,  five  per  cent.,  due  1937, 


Digitized  by 


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BANKING  AND  FINANCIAL  NOTES. 


141 


Not.  1.  Interest  due  May  1 and  November 
1,  at  Central  Trust  Co.,  New  York  city, 
$40,000.  Nos.  6312,  6912,  6936,  7079,  7726, 
9401,  9993,  11887,  12201,  1 2202,  15218,  15219, 
15220,  15221,  15222,  15223,  15224,  15225, 

1 j226,  15227,  15228,  15229,  15230,  15231, 

15232,  15233,  15234,  15235,  15236,  15237, 

15694,  18318,  18324,  20323,  20324,  20325, 

20326,  20327,  20328,  20329,  20330,  20331, 

20332,  20333,  20334,  20335,  20336,  20337, 

20338. 

EASTERN  STATES. 

— The  finance  committee  of  the  Pitts- 
burg city  council  has  selected  the  following 
six  banks  of  that  city  as  depositories  of  the 
city’s  funds  for  a term  of  four  years  be- 
ginning next  January:  The  Columbia  Na- 
tional, the  Farmers  Deposit  National,  the 
Second  National,  the  German  National  of 
the  old  city,  the  German  National  of  the 
North  Side  and  the  Workingmen’s  Savings 
and  Trust  Co.  The  first  three  are  deposi- 
tories at  present.  The  German  National  of 
the  old  city  takes  the  place  of  the  Allegheny 
National.  It  was  also  elected  to  take  the 
place  of  that  bank  for  the  remainder  of  the 
year. 

— It  is.  understood  that  directors  of  the 
International  Savings  and  Trust  Company 
of  Pittsburg  has  considered  an  offer  made 
for  the  purchase  of  the  business  of  the 
concern.  The  company,  which  was  organ- 
ised in  1903  and  has  $255,025  capital  stock 
paid  in,  is  located  at  Seventh  and  Liberty 
avenues.  W.  M.  Laird  is  president.  There  is 
talk  of  an  effort  being  made  to  merge  this 
company  with  another. 

— Bank  Examiner  William  L.  Folds  has 
declined  to  accept  the  presidency  of  the 
Fort  Pitt  National  Bank  of  Pittsburg,  for 
which  efforts  are  now  being  made  to  effect 
a reorganisation,  the  institution  having  been 
closed  for  some  time. 

Some  of  those  interested  thought  it  would 
be  a good  thing  to  have  at  the  head  of 
the  bank  a man  of  the  reputation  of  Folds, 
who  discovered  the  $1,105,000  defalcation  of 
John  Young  and  Henry  Reiber  in  the 
Farmers  Deposit  National  and  the  embezzle- 
ment of  about  $2,000,000  by  Cashier  Wil- 
liam Montgomery  in  the  Allegheny  National. 

Beyond  stating  that  he  could  not  accept 


the  position,  Mr.  Folds  declined  to  discuss 
the  subject. 

The  receiver  of  the  Fort  Pitt  National 
Bank  has  announced  a dividend  of  fifty  per 
cent,  to  depositors. 

— A very  sad  accident  occurred  on  June 
22,  at  a base-ball  game  between  teams  rep- 
resenting the  Freehold  and  Pittsburg  (Pa.) 
Trust  Companies,  when  they  crossed  bats  in 
Baldwin  township  just  outside  Brookline. 

In  a spirit  of  fun  and  at  an  exciting 
moment  during  the  game,  William  F.  Mason, 
resident  agent  in  Brookline  of  the  Freehold 
Trust  Co.,  shot  and  killed  his  best  friend, 
Edward  T.  J.  Haas  of  the  same  company, 
and  wounded  J.  H.  McGinity,  savings  teller 
of  the  Pittsburg  Trust  Co.  The  gun  was 
supposed  to  contain  a blank  shell,  but  in- 
stead carried  a charge  of  buckshot. 

— The  Bankers  Ad.  Association  of  Pitts- 
burg with  representatives  from  all  the  prin- 
cipal banking  institutions  of  the  city  pres- 
ent, held  a meeting  and  dinner  June  10  at 
the  Seventh  Avenue  Hotel.  A.  D.  Sallee, 
president  of  the  association  presided.  A 
general  discussion  of  “Mountebank  Bank 
Advertising”  was  held.  Those  present  in- 
cluded J.  E.  Haines,  H.  E.  Leety,  W.  G. 
Gundelfinger,  E.  R.  Baldinger,  B.  H.  Smy- 
ers,  W.  C.  Zeigler,  D.  C.  Wills,  H.  F.  Wig- 
man,  C.  E.  Schuetz,  A.  D.  Sailee,  G.  K. 
Reed,  W.  L.  McCullagh,  H.  S.  Hershberger, 
P.  C.  Dunlevy,  Alexander  Dunbar  and  E. 
R.  Wilson. 

— Creditors  of  the  Iron  City  Trust  Com- 
pany of  Pittsburg,  which  went  into  the 
hands  of  receivers  several  months  ago,  not 
only  will  be  paid  100  cents  on  the  dollar,  but 
will  receive  interest  on  their  claims.  There 
also  will  be  a nice  little  balance  after 
the  settlement  of  all  claims.  Eighty-five 
per  cent,  of  the  claims  were  paid  some 
time  ago  and  the  rest,  on  recommenda- 
tion of  Special  Master  Edwin  L.  Mattem, 
will  be  paid  now.  The  receivers,  H.  S.  A. 
Stewart  and  William  L.  Abbott,  have  on 
hand  $272,799.69  for  distribution.  The 
amount  due  all  creditors  is  $236,060.68. 

— The  American  Bank  of  Philadelphia 
opened  June  1 at  Broad  street  and  Passyunk 
avenue  that  city,  with  these  officers: 


a and  Paper  Money  bought,  sold,  appraised,  and  sold  at  auction- 
s' Iv  M Ancient  Mediaeval  and  Modern  Coins,  Medals  and  Tokens  in  large 

JTjw®  JR  xk  variety  for  sale.  Private  Anieri  an  Gold  Coins  bought.  (Send  Rub- 

bings or  description.)  Goods  sent  on  approval.  Premium  List  10c. 
W XT  Retail  Lists  free. 

LUIIlO  THOMAS  L ELDER,  32  E.  23rd  Street,  NEW  YORK  CITY 

Member  American  Numismatic  Society,  Fellow  of  the  Royal  Numismatic  Society  of  London,  and  British 
Numismatic  Society. 


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142 


THE  BANKERS  MAGAZINE. 


President,  George  W.  Shisler;  first  vice- 
president,  John  Burt;  second  vice-president, 
John  H.  Baisley;  cashier,  Frank  H.  Tuft. 

The  bank  has  a capital  stock  of  $50,000 
and  a surplus  of  $10,000  and  is  controlled 
by  prominent  capitalists  of  the  Quaker  City. 

—The  Union  National  Bank  of  Philadel- 
phia, William  H.  Carpenter,  president, 
issued  on  June  8 its  initial  statement  show- 
ing  the  position  of  the  bank  since  the  pur- 
chase of  the  assets  of  the  Consolidation 
National  on  June  6.  The  report  shows  re- 
sources of  $7,585,847  for  the  Union  National. 
Deposits  aggregate  $5,669,514  and  surplus 
and  net  profits  $711,332. 

— At  the  annual  election  of  the  Mer- 
chants* Trust  Company  of  Philadelphia,  the 
following  five  directors  were  elected  to  serve 
for  three  years:  S.  Davis  Page,  Joseph  R. 
Rhoads,  John  H.  Craven,  John  S.  Bioren 
and  William  Lucas.  The  company’s  an- 
nual report  showed  resources  of  $1,700,936, 
and  gross  earnings  amounted  to  $110,682. 

— Messrs.  Shoemaker,  Bates  & Co.,  bank- 
ers, members  of  the  New  York  Stock  Ex- 
change, have  opened  a Philadelphia  branch 
office  at  No.  217  Real  Estate  Trust  Build- 
ing, in  charge  of  S.  G.  Williamson,  form- 
erly with  E.  Gay  & Co. 

— Two  of  the  rarest  specimens  of  the 
American  private  gold  coinage  were  sold 
at  the  auction  of  old  coins  held  by  Henry 
Chapman  at  Philadelphia  June  17  and  18. 
The  first  of  these  was  a flve-dollar  gold- 


A.  B.  Leach  & Co. 

BANKERS 
149  Broadway,  New  York 


DEALERS  IN 

HIGH  GRADE  BONDS 

Suitable  for  the  Invest- 
ment of  Savings  Banks 
and  Trust  Fund  : : : 


140  Daarborn  St , - OHIOAGO 
28  State  St.,  ...  BOSTON 
421  Chestnut  St.,  - . PHILS. 


piece  struck  in  Colorado  during  the  “Pike’s 
Peak  or  Bust”  days  by  a firm  of  jewelers 
and  bankers,  J.  J.  Conway  & Co.,  at  a 
small  mining  camp  in  the  famous  Georgia 
Gulch  district  and  was  sold  to  Thomas  L. 
Elder  of  32  E.  23d  street,  New  York. 

This  coin  is  of  original  design,  and  in- 
trinsically worth  over  five  dollars,  having 
been  struck  from  the  unrefined  native  gold, 
and  it  is  the  scarcest  of  the  various  issues 
of  private  gold  coinage  which  took  place 
in  the  Centennial  State  during  the  gold  ex- 
citement days.  So  far  as  known,  the  only 
other  piece  in  existence  is  that  in  the  coin 
collection  of  the  Philadelphia  mint  The 
second  coin  is  a ten-dollar  goldpiece  issued 
by  the  Cincinnati  Mining  and  Trading  Com- 
pany in  California  in  the  days  of  ’49,  and 
bears  an  Indian’s  head,  surmounted  by  a 
chaplet  of  feathers.  On  the  reverse  is  a 
somewhat  attenuated  eagle.  Crude  as  the 
design  may  be,  this  ten-dollar  piece  enjoys 
the  distinction  of  having  brought  the  high- 
est premium  ever  given  for  a specimen  of 
private  gold  coinage,  $2,109  being  paid  the 
other  day  for  a similar  specimen  at  the 
Sotheby  sale  in  London. 

— At  the  recent  annual  meeting  of  the 
Tradesmen’s  Trust  Company  of  Philadel- 
phia, all  the  directors  were  re-elected  with 
the  exception  of  Edward  G.  Davis,  who  was 
succeeded  by  Henry  C.  Trumbower. 

— O.  P.  Bechtel,  who  retired  last  Jan- 
uary after  serving  thirty  years  as  a judge 
of  Schuylkill  County,  Pa.,  was  on  June  19 
elected  president  of  the  Merchants’  Na- 
tional Bank  of  Pottsville,  Pa. 

— The  national  bank  members  of  the 
Buffalo  Clearing-House  have  formed  the 
nucleus  of  one  section  of  the  National  Cur- 
rency Association,  now  in  progress  of  or- 
ganization. This  association  is  called  for 
under  the  terms  of  the  recent  Aldrich- 
Vreeland  bill,  and  when  in  operation  will 
be  the  medium  for  the  issuing  of  Govern- 
ment currency  to  individual  banks. 

At  a meeting  held  recently  it  was  de- 
cided to  do  nothing  definite  until  action 
shall  have  been  taken  by  the  larger  cities. 
As  organization  blanks  have  been  sent  to 
all  the  great  centers  by  the  Secretary  of  the 
Treasury,  it  is  expected  that  the  permanent 
organization  will  be  formed  within  a short 
time. 

When  the  plans  for  the  association  are 
complete  the  national  banks  in  the  eight 
counties  of  Western  New  \ork  will  be  re- 
quested to  join  with  the  Buffalo  banks, 
with  this  city  as  the  center  of  a section. 
Other  sections  will  be  established  with  large 
cities  as  centers,  and  all  will  be  linked  to- 
gether as  the  National  Currency  Associa-  * 
tion. 


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BANKING  AND  FINANCIAL  NOTES. 


143 


— The  First  National  Bank  of  Washing- 
ton, Pa.,  has  reorganized  its  governing 
board,  electing  an  entire  new  set  of  officers 
and  directors. 

W.  C.  McBride  was  made  president  in 
place  of  S.  M.  Templeton.  Robert  L.  Mc- 
Carrell,  former  assistant  cashier,  was  elect- 
ed vice-president,  succeeding  D.  M.  Dona- 
hoo  and  John  W.  Seaman.  Joseph  C. 
Baird  was  named  cashier  in  place  of  Charles 
S.  Ritchie.  Joseph  Zelt  was  retained  as 
assistant  cashier. 

— Daniel  S.  Tobin,  for  a number  of  years 
sec  re  tan*  of  the  McKeesport,  Pa.,  Water 
Works,  has  been  elected  cashier  of  the 
Merchant’  Bank  of  that  city,  succeeding  H. 
H.  W.  Schuchmann,  resigned. 

— H.  W.  Rhodes,  who  has  been  secretary 
and  treasurer  of  the  Media  Title  and  Trust 
Co.  of  Chester,  Pa.,  for  a number  of  years, 
has  been  elected  president  to  fill  the  va- 
cancy caused  by  the  death  of  George 
Drayton. 

— For  the  first  week  of  business  of  the 
Emerson  National  Bank  of  Warrensburgh, 
N.  Y.,  which  ended  with  the  close  of  busi- 
ness June  1,  $100,000  in  new  deposits  were 
received. 

— A very  excellent  report  comes  from 
the  Peoples  Bank  of  Buffalo,  N.  Y.,  dated 
June  17,  showing  their  financial  condition 
and  standing. 

This  institution  with  the  small  capital 
stock  of  $300,000,  has  a quarter  of  a mil- 
lion dollars  credited  to  its  surplus  and  un- 
divided profits  account,  and  deposits  of 
nearly  five  millions  of  dollars,  a very  ma- 
terial increase  over  its  last  statement. 

The  People’s  Bank  is  strongly  officered 
and  is  gaining  an  enviable  reputation  for 
courteous  treatment,  prompt  service  and 
all  the  essentials  required  of  a bank  by  those 
doing  business  with  it. 

— At  a meeting  of  the  board  of  directors 
of  the  National  Bank  of  Auburn,  N.  Y., 
held  recently,  George  B.  Longstreet  was 
elected  president,  succeeding  Edward  H. 
Avery,  deceased.  Mr.  Longstreet  has  been 


connected  with  this  bank  over  thirty  years, 
having  served  eighteen  years  in  official  ca- 
pacity. Charles  F.  Stupp  has  been  ap- 
pointed assistant  cashier. 

— A controlling  interest  in  the  National 
City  Bank  of  Washington,  D.  C.,  has 
passed  to  the  Union  Savings  Bank  of  that 
city.  Of  the  3,000  shares  of  the  National 
City,  1,600  have  been  purchased  by  the 
new  interests  at  $170  per  $100  share.  As 
a result  of  the  change  in  the  control  of  the 
National  City,  that  institution  will  take 
over  the  deposits  of  the  Washington  Ex- 
change Bank,  an  institution  affiliated  with 
the  Union  Savings  Bank,  and  the  Exchange 
Bank  will  be  placed  in  liquidation.  The 
last-named  bank  has  a capital  of  $150,000 
and  deposits  of  about  $230,000.  E.  Quincy 
Smith,  president  of  the  Union  Savings  Bank, 
has  been  elected  president  of  the  National 
City,  and  Edward  S.  Munford  has  become 
its  vice-president.  A.  G.  Clapham  remains 
as  cashier  and  R.  E.  White  as  assistant 
cashier  of  the  National  City. 

— As  a fitting  memorial  to  a century  of 
prosperous  and  useful  service,  the  Trenton 
Banking  Company  of  Trenton,  N.  J.,  has 
published  and  distributed  among  its  friends 
a handsome  cloth-bound  history  of  the 
bank,  dating  back  to  its  organization  in 
1805. 

The  volume  is  artistically  printed  and 
illustrated  with  many  rare  old  engravings, 
and  contains  a biographical  sketch  of  every 
officer  who  has  been  connected  with  the 
bank  during  its  existence. 

When  first  organized,  the  Trenton  Bank- 
ing Company  had  a capital  stock  of  $59,- 
580;  for  the  last  four  decades  the  capital 
stock  has  been  $500,000. 

One  of  the  interesting  features  of  the 
volume  is  a table  showing  the  decennial 
statements  from  1805  to  1906  inclusive. 

Isaac  Smith,  a physician,  judge  and  pa- 
triot of  ’76,  was  the  first  president  of  the 
Trenton  Banking  Company,  Pearson  Hunt 
the  first  cashier. 

The  present  officers  are:  John  A.  Camp- 
bell, president;  Elmer  Ewing  Green,  vice- 
president;  Robert  W.  Howell,  cashier. 


The  Detroit  Coin  Wrapper 


Millions  are  used  annually  by  large  handlers 
of  coin.  Made  to  hold  all  silver  coins,  nickels, 
pennies,  etc  , in  amounts  from  25  cents  np  to 
$20.00.  Write  for  samples  and  quotations. 


DETROIT  COIN  WRAPPER  CO. 

16  John  R Street,  Detroit,  Mich. 


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144 


THE  BANKERS  MAGAZINE. 


MIDDLE  STATES. 

— The  First  Trust  and  Savings  Bank  of 
Chicago,  which  was  organized  in  Decem- 
ber, 1903,  has  had  a healthy,  steady  growth 
during  the  four  and  one-half  years  of  its 
existence,  and  now  finds  it  necessary  to 
oecuy  considerably  enlarged  quarters,  ow- 
ing to  the  generous  support  given  it  by  the 
savings  and  investing  public.  Its  office 
space  on  the  ground  floor  of  the  First  Na- 
tional Bank  building  has  been  nearly 
doubled,  and  the  enlarged  room  will,  no 
doubt,  insure  a continuance  of  the  superior 
service  which  has  been  characteristic  of  the 
institution. 

This  bank,  whose  president,  James  B. 
Forgan,  is  also  president  of  the  First  Na- 
tional Bank  of  Chicago,  is  under  the  man- 
agement of  the  same  board  of  directors  as 
is  the  First  National,  and  the  stock  is 
owned  by  the  stockholders  of  that  institu- 
tion. 

The  functions  include  those  of  a savings 
bank,  trust  company,  bond  house,  and 
reserve  depositary — in  fact,  every  conser- 
vative form  of  financial  service  except  that 
of  a commercial  bank. 

Primarily  established  to  provide  savings 
and  fiduciary  facilities  to  the  clients  of  the 
First  National  Bank  of  Chicago,  the  First 
Trust  and  Savings  Bank  has  received  such 
liberal  endorsement  from  the  general  pub- 
lic that  its  deposits,  representing  the  ac- 
counts of  many  thousands  of  people,  now 
exceed  $33,000,000,  and  are  still  growing. 

— In  their  comparative  statement  of  con- 
dition made  May  14,  the  Bankers  National 
Bank  of  Chicago,  which  has  a paid-in  capital 
of  $3,000,000,  shows  some  large  gains  in 
deposits. 

In  brief,  the  report  was  as  follows: 

May  14,  1900,  deposits  were  $9,466,695.70 
May  14,  1904,  deposits  were  $13,431,017.80 
May  14,  1908,  deposits  were  $20,248,161.43 

— There  have  been  some  important  changes 
made  in  three  of  the  larger  Chicago  banks 
which  embody  the  election  of  new  officers. 

L.  A.  Goddard  has  resigned  as  president 
of  the  Fort  Dearborn  National  Bank  to 
become  vice-president  of  the  State  Bank  of 
Chicago.  He  assumed  his  new  duties  on 
June  2.  The  directors  of  the  Fort  Dear- 
born then  met  and  elected  William  A.  Til- 
den,  president  of  the  Drovers  Deposit  Na- 
tional, to  succeed  Mr.  Goddard  as  head  of 
the  Fort  Dearborn  National  Bank. 

This  change  left  the  Drovers  Deposit 
National  without  a president  and  according- 
ly R.  T.  Forbes,  vice-president,  was  elected 
Mr.  Tilden’s  successor. 

In  its  last  official  statement  the  State 
Bank  showed  $17,638,700  deposits  and  $12,- 
378,800  loans  and  discounts.  The  bank’s 
capital  stock  is  $1,000,000  and  the  surplus 


and  undivided  profits  $1,194,700,  giving  a 
book  value  of  $219  a share.  Recently  the 
directors  decided  to  increase  the  dividend 
on  the  stock  from  ten  per  cent,  to  twelve 
per  cent,  a year,  and  the  quarterly  pay- 
ment June  30  was  made  at  the  increased 
rate. 

The  Fort  Dearborn  National  reports  $10,- 
956,000  deposits  and  $6,294,000  loans.  The 
bank  has  $1,000,000  capital,  $411,440  surplus 
and  profits  and  the  stock  a book  value  of 
141. 

— Stockholders  of  the  Federal  National 
Bank  of  Chicago,  which  is  in  the  course  of 
liquidation,  have  been  paid  another  ten  per 
cent,  making  sixty  per  cent,  paid  so  far. 

— John  A.  Spoor  has  been  elected  vice- 
president  of  the  Live  Stock  Exchange  Na- 
tional Bank  of  Chicago. 

— The  Home  Savings  Bank  of  Detroit, 
Mich.,  announces  that  for  the  first  time  in 
its  history  its  deposits  have  passed  the  $6,- 
000,000  mark.  The  savings  deposits  total 
$4,008,284.87,  showing  an  increase  of  up- 
wards of  $200,000  since  Feb.  1 last. 

— What  are  supposed  to  be  the  handsom- 
est banking  quarters  in  the  state  of  Michi- 
gan were  opened  in  Detroit  June  1,  by  the 
First  National  Bank  of  that  city,  at  which 
time  an  impromptu  reception  was  held. 

The  bank  is  one  vast  room — all  of  the 
first  floor  being  occupied  except  the  small 
space  taken  for  entrance  hall  and  elevators. 
In  its  sweep,  decorations  and  furnishings 
it  is  one  of  the  most  elegant  banking  rooms 
in  the  country. 

It  was  thronged  on  the  opening  day 
with  customers  and  visitors.  There  were 
floral  remembrances  of  the  day  in  profu- 
sion from  other  financial  institutions  in  the 
city.  President  M.  L.  Williams,  Vice-Presi- 
dents John  T.  Shaw  and  Emory  W.  Clark, 
and  all  the  assistant  cashiers,  did  little  else 
during  the  day  but  receive  visitors  and  reply 
to  congratulations. 

The  bank  is  entered  through  the  Ford 
building  main  entrance  hall,  there  being 
large  doors  opening  into  the  bank  at  both 
sides  of  the  hall.  Near  the  entrance  on  the 
south  side  and  around  the  Griswold  and 
Congress  street  corner  are  the  private  rooms 
of  the  president  and  vice-presidents.  Near 
the  north  side  doors  is  the  ladies’  depart- 
ment, semi-private,  and  furnished  with  cost- 
ly rugs  and  chairs.  All  the  furniture  is  of 
mahogany. 

— The  Peninsula  Savings  Bank  of  De- 
troit, Mich.,  has  increased  its  capital  from 
$400,000  to  $500,000,  and  brought  its  sur- 
plus up  to  $200,000.  It  has  an  aggregate 
business  of  $6,000,000. 


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145 


— A handsome  modern  stone  and  brick 
building  will  be  erected  during  the  summer 
for  the  use  of  the  White  County  Bank, 
Carmi,  111.  Ground  has  also  been  bought 
by  the  National  Bank  of  Carmi  for  a new 
building  to  go  up  soon. 

— One  of  the  largest  and  most  successful 
banks  in  southern  Illinois,  the  First  Bank 
and  Trust  Company  of  Cairo,  in  a late  re- 
port, gives  its  resources  at  $1,671,919  and 
its  deposits  at  $1,324,026. 

This  bank  has  been  in  business  for  forty- 
two  years  and  has  always  been  ably  and 
conservatively  managed,  as  its  present  state- 
ment goes  to  prove. 


First  Bank  and  Trust  Co.,  Cairo,  111. 


The  building  shown  is  a modem  one  in 
every  particular  and  contains  large  steel 
vaults  for  renting  to  customers  with  valu- 
ables to  protect  from  tire  and  burglary. 

Officers  of  the  First  Bank  and  Trust 
Company  are:  President,  J.  S.  Aisthorpe; 
vice-presidents,  H.  S.  Candee,  W.  H.  Wood, 
and  W.  P.  Halliday ; cashier  and  secretary. 
Geo.  F.  Ort;  assistant  cashier  and  assistant 
secretary,  H.  R.  Aisthorpe. 

—There  will  be  no  merger  of  the  Title 
Guaranty  Trust  Company  of  St.  Louis,  Mo., 
with  the  Lincoln  Trust  and  Title  Company 
as  proposed  some  time  ago.  Directors  of 
the  Title  and  Guaranty  Company  have  re- 
jected the  plan. 

—Charles  H.  Moore,  who  has  been  treas- 
urer of  the  Commerce  Trust  Company  of 
Kansas  City,  Mo.,  has  been  elected  second 
vice-president  of  the  National  Bank  of 
Commerce.  Mr.  Moore  was  assistant  cash- 
ier of  the  National  Bank  of  Commerce  be- 
fore it  closed  and  has  been  identified  with 
it  for  twenty-five  years. 


— Thomas  Brusegaard  has  been  elected 
president  of  the  State  Bank  of  St.  Paul, 
Minn.  He  will  make  his  permanent  resi- 
dence in  St.  Paul,  and  take  an  active  part 
in  the  management  of  the  bank.  He  was 
for  seventeen  years  engaged  in  banking  at 
Brandon,  Minn. 

— A new  institution,  known  as  the  First 
State  Bank  has  been  organized  in  Flood- 
wood,  Minn.  The  bank  has  a capital  of 
$21,000  and  is  successor  to  the  Bank  of 
Floodwood.  M.  H.  Schussler  is  president, 
A.  D.  Haish  is  vice-president,  and  C.  D. 
Rutherford  is  cashier. 

— One  of  the  most  successful  meetings  of 
the  Iowa  Bankers'  Association  ever  held  in 
that  state,  convened  at  Sioux  City  June  11- 
12.  It  was  largely  attended,  as  the  asso- 
ciation now  has  close  to  1200  members,  and 
every  b’ank  chose  to  have  one  or  more 
representatives  present. 

— Council  Bluffs,  Iowa,  will  have  another 
national  bank  in  the  near  future.  Just  what 
its  capitalization  will  be  has  not  been  dis- 
closed, but  doubtless  it  will  be  a formidable 
institution  in  the  local  field,  as  preparations 
are  under  way  to  remodel  the  Hannan  block 
for  its  use. 

Directors  of  the  Merchants  National  Bank 
of  Cedar  Rapids,  Iowa,  have  elected  Jas. 
E.  Hamilton  vice-president  and  J.  S. 
Brocksmit  to  succeed  Mr.  Hamilton  as 
cashier. 

— After  twenty  years  of  success  as  a 
State  banking  institution,  the  Citizens  State 
Bank  of  Knightstown,  Ind.,  is  to  become  a 
national  bank.  No  changes  will  be  made  in 
the  official  management  of  the  bank,  which 
has  been  an  important  factor  in  the  com- 
munity it  serves.  L.  P.  Newby,  for  seven- 
teen years  president  of  the  bank,  will  con- 
tinue in  that  office;  F.  J.  Vestal,  who  has 
been  connected  with  the  Citizens*  as  assist- 
ant cashier,  cashier  and  vice-president  for 
eighteen  years,  will  be  vice-president,  and 
A.  L.  Slage,  who  has  served  the  bank  for 
fifteen  years  as  assistant  cashier  and  cash- 
ier, will  be  the  cashier  of  the  institution  un- 
der its  national  charter. 

— About  500  persons  were  assembled  be- 
fore the  Peoples  Bank  of  Columbus,  Ohio, 
when  the  doors  were  opened  on  the  morning 
of  June  24,  but  after  many  had  drawn  their 
savings  the  incipient  run  was  over  and  nor- 
mal conditions  prevailed  the  remainder  of 
the  day. 

While  the  run  was  in  progress,  $3200  in 
cash  was  found  at  the  home  of  Harry  R. 
Huggett,  the  cashier,  who  suicided  the 
night  before. 


10 


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146 


THE  BANKERS  MAGAZINE. 


— In  response  to  the  comptroller’s  call  for 
May  14,  the  First  National  Bank  of  Shen- 
andoah gave  its  resources  as  $963,871 ; capi- 
tal as  $50,000;  deposits  as  $771,394  and 
surplus  fund  as  $92,477.  The  deposit  item 
represents  an  increase  of  $63,577  as  com- 
pared with  the  February  14  statement. 

SOUTHERN  STATES. 

— Members  of  the  West  Virginia  Bankers 
Association  met  at  Charleston,  W.  Va.,  June 
10,  and  held  their  fifteenth  annual  conven- 
tion. They  were  welcomed  on  behalf  of  the 
city  by  Mayor  James  A.  Ilolley,  and  on  be- 
half of  the  bankers  of  Charleston  by  Wesley 
Mollohan,  president  of  the  Citizens*  National 
Bank,  to  which  response  was  made  by  C.  T. 
Hiteshew,  cashier  of  the  Farmers’  & Mech- 
anics’ National  Bank,  Parkersburg,  W.  Va. 

After  the  annual  address  by  president  W. 
G.  Wilson  and  the  report  of  W.  B.  Ivirne, 
secretary  and  treasurer,  Hon.  Charles  Mc- 
Camie,  of  Wheeling,  addressed  the  conven- 
tion on  bank  taxation. 

At  the  evening  session  Hon.  Charles  N. 
Fowler,  chairman  of  the  Committee  on 
Banking  and  Currency,  House  of  Repre- 
sentatives, discussed  the  currency  question. 

At  the  session  on  Thursday  addresses 
were  made  by  Thos.  E.  Hodges,  of  West 
Virginia  University,  president  of  Bank  of 
Morgantown,  W.  Va.,  and  Samuel  V. 
Matthews,  Commissioner  of  Banking  of  the 
State  of  West  Virginia. 

— At  a recent  election  held  by  the  Bank 
of  Clinch  Valley,  Tazewell,  Va.,  several  new 
officers  were  installed. 

A.  St.  Clair  is  the  new  president,  to  suc- 
ceed the  late  John  W.  Crockett,  and  Henry 
S.  Bowen  is  the  new  vice-president  to  suc- 
ceed B.  W.  Stras,  resigned. 

The  bank  has  a capital  stock  of  $100,000 
and  undivided  profits  of  $40,000  and  has 
been  very  successful. 

— Work  has  been  started  on  a splen- 
did up-to-date  bank  building  at  Crozet,  Va. 
It  will  be  a concrete  structure  thirty-eight 
by  forty-eight  feet,  two  stories  high,  with 
granite  front,  and  will  be  heated  by  steam 
and  lighted  by  gas. 

When  completed  it  will  be  owned  and  oc- 
cupied by  the  Bank  of  Crozet,  Incorporated, 
which  has  outgrown  its  present  quarters,  and 
will  be  one  of  the  finest  -equipped  banking 


L..T— 

You  arc  Invited  to  come  and 
see  the  new  telegraph  com- 
pany transmit  1.000  words 
a minute  over  a single  wire. 
If  unable  to  call  write  for  il- 
lustrated Booklet,  No.  67, 
which  gives  full  particulars. 

Tr.LEI'OSTCOMrAXV 
225  Fifth  A to.,  N.  V. 
and  Union  Trout  ltldg., 
IV  ashing! on. 

pLEP^ 

buildings  for  a town  of  its  size  in  the  state. 

Russell  Bargamin  is  president  of  the 
bank,  and  it  is  mainly  through  his  untiring 
energy  and  business  ability  that  the  town 
will  be  able  to  boast  of  such  a banking  in- 
stitution. 


— W.  F.  Winecoff,  one  of  the  best  known 
capitalists  of  Atlanta,  was  on  June  6 elect- 
ed a director  in  the  Atlanta  (Ga.)  National 
Bank.  Mr.  Winecoff  is  president  of  the 
General  Realty  Company,  and  is  a large 
dealer  in  Atlanta  real  estate  and  other  busi- 
ness enterprises. 

The  Atlanta  National,  in  adding  Mr. 
Winecoff  to  its  board  of  directors,  is  mere- 
ly following  out  its  announced  intention  a 
short  time  ago,  when  it  increased  its  capi- 
tal stock  and  surplus,  and  gave  notice  of  its 
intention  to  add  a number  of  new  members 
to  its  board. 


— The  Commercial  and  Savings  Bank  of 
Macon,  Ga.,  becomes  a national  bank  this 
month.  This  move  was  decided  upon  a few 
days  ago  by  the  board  of  directors  and 
stockholders.  It  will  be  capitalized  at  be- 
tween $300,000  and  $400,000.  The  officers 
are  to  remain  the  same,  E.  Y.  Mallory, 
president,  and  J.  J.  Cobb,  cashier. 

— Walker  Scott,  who  for  several  years  has 
been  the  assistant  cashier  of  the  Planters 
Bank,  of  Farmville,  Va.,  has  been  elected 
cashier  to  succeed  W.  P.  Venable  who  re- 
signed to  engage  in  other  business.  R.  S. 
Warren,  formerly  cashier  cf  the  State  Bank 
of  Arvonia,  Va.,  has  been  elected  assistant 
cashier  to  succeed  Mr.  Scott.  The  officers 
report  the  Planters  Bank  as  never  being  in 
a better  condition.  It  has  capital,  surplus 
and  profits,  $120,000. 

— On  May  23  the  elegant  new  home  of 
the  First  National  Bank  of  Pensacola,  Fla., 
was  thrown  open  to  public  inspection  and 
on  that  day  many  distinguished  visitors 
took  advantage  of  the  opportunity  offered 
them  to  admire  its  architecture  and  finish. 

— Robert  Holmes  has  been  elected  vice- 
president  of  the  First  National,  Sparta, 
Georgia.  John  Walker  is  president  of  the 
bank,  which  has  a capital,  surplus  and  un- 
divided profits  of  $62,000. 

— At  a recent  meeting,  the  directors  of 
the  Amite  Bank  & Trust  Company,  at  Amite 
City,  La.,  declared  a dividend  of  five  per 
cent.  The  bank,  which  is  in  prosperous 
condition,  has  just  purchased  an  attractive 
new  building  on  East  Railroad  avenue  and 
will  move  as  soon  as  the  necessary  arrange- 
ments can  be  made. 


— Plans  for  the  structure  to  be  erected 
by  the  City  National  Bank  of  Knoxville, 
Tenn.,  are  now  under  way  in  the  office  of  a 


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BANKING  AND  FINANCIAL  NOTES. 


New  York  firm.  The  plans  call  for  a 
single  story  banking  building,  with  a dome 
about  seventy  feet  in  height.  The  front 
will  be  all  marble,  and  a handsome  build- 
ing is  promised. 

—The  Citizens’  Bank  & Trust  Co.  of 
Chattanooga,  Tenn.,  has  decided  to  organize 
under  the  Federal  laws.  An  application 
for  its  conversion  into  the  Citizens’  Na- 
tional Bank  was  approved  by  the  Comp- 
troller of  the  Currency  on  June  10.  On 
June  4 the  stockholders  of  the  institution 
took  action  on  the  question  of  increasing 
the  capital  from  $250,000  to  $300,000,  the 
enlarged  capital  becoming  effective  on  that 
date.  The  new  stock,  par  $100,  was  sold  at 
$120  per  share.  The  bank  reports  a sur- 
plus of  $100,000,  the  amount  having  been 
increased  practically  $15,000  within  the 
past  two  months. 

—The  Capital  City  Savings  Bank,  the 
only  negro  bank  in  Arkansas,  went  into 
the  hands  of  a receiver  June  19,  on  request 
of  Charles  B.  King,  the  cashier. 

Because  an  illiterate  negro  had  overdrawn 
his  account  and  had  his  check  refused,  he 
started  a report  that  the  bank  was  insol- 
ent. Several  hundred  negro  depositors 
appeared  before  the  institution  demanding 
their  money.  There  was  only  $2,000  in  cash 
on  hand  and  the  doors  were  not  opened. 

The  liabilities  are  about  $75,000,  with 
assets  considerably  in  excess. 

— Charles  H.  Treat,  United  States  Treas- 
urer, addressed  the  Georgia  Bankers’  Asso- 
ciation at  Brunswick  June  12,  on  the  finan- 
cial legislation  that  has  been  accomplished 
under  President  Roosevelt’s  administration. 

He  said  that  the  interest  of  the  general 
public  had  been  so  much  absorbed  by  other 
legislation  with  which  the  administration 
was  identified,  such  as  railroad  regulation, 
the  pure  food  law  and  like  reforms,  that 
they  had  lost  sight  of  the  beneficial  results 
that  accrued  to  the  business  world  from 
the  financial  legislation  that  was  urged  by 
the  president. 

Mr.  Treat’s  address  was  the  feature  of 
the  convention  which  all  pronounced  ex- 
ceptionally good  and  which  was  well  at- 
tended. 

— On  July  1,  the  American  Bank  and 
Trust  Company  of  Houston,  Texas,  sur- 


147 

rendered  its  state  charter  and  became  the 
American  N ational  Bank,  with  a capital 
stock  of  $300,000,  all  subscribed. 

The  American  Bank  and  Trust  Company 
was  organized  August  13,  1905,  with  a 
capital  of  $100,000  and  started  with  a good 
business,  which  by  good  management  has 
been  steadily  built  up.  Frank  W.  Vaughan 
has  been  cashier  since  the  organization  of 
the  bank  and  has  given  every  evidence  of 
being  conservative  and  at  the  same  time 
accommodating,  the  two  qualities  which 
make  for  the  successful  banker.  W.  E. 
Richards  has  been  president  for  only  a 
few  months,  but  has  created  for  himself  a 
place  in  the  business  life  of  Houston  and 
has  shown  that  in  the  enlarged  field  of  the 
institution  he  will  be  at  home. 

— At  a meeting  of  the  board  of  directors 
of  Britton  and  Keontz  Bank,  Natchez,  Miss., 
held  June  2,  the  following  officers  were 
elected  to  serve  during  the  ensuing  year: 

George  W.  Koontz,  president;  A.  B. 
Learned,  vice-president;  F.  C.  Martin,  vice- 
president;  C.  B.  Richardson,  Jr.,  cashier. 

WESTERN  STATES. 

—Statistics  show  that  bank  deposits  in 
South  Dakota  are  approximately  $100  for 
each  resident  of  the  state.  While  there  has 
been  a decided  increase  in  population  the 
past  year,  the  deposits  have  been  practically 
keeping  pace  with  this  Increase.  The  banks 
at  the  time  of  the  last  call  had  individual 
deposits  to  the  amount  of  $53,686,885.  There 
are  a far  greater  number  of  state  banks 
than  nationals,  and  while  the  latter  carry 
greater  deposits  for  each  bank  than  the 
average  state  bank,  the  states  hold  by  far 
the  largest  amounts  of  deposits.  That 
class  of  banks  had  $34,125,956  at  the  time 
of  the  March  call,  an  increase  of  nearly 
$3,000,000  from  the  date  of  the  December 
call.  The  nationals  with  $19,560,929  showed 
a decrease  of  a million  and  a third  dollars 
for  the  same  time,  leaving  a net  gain  for 
the  state  of  about  $1,500,000. 

While  the  state  has  for  years  held  the 
record  for  the  greatest  per  capita  produc- 
tion of  new  wealth,  it  is  also  holding  its 
own  in  its  bank  deposits. 

— C.  H.  Randall,  who  has  been  serving  as 
cashier  of  the  Security  National  Bank, 


SIGNS 


FOR 

BANKS 


Catalog  B on  application 

C H BUCK  4 CO 

309  Washington  Street 
Boston,  Mass. 


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148 


THE  BANKERS  MAGAZINE 


Randolph,  Neb.,  has  been  elected  to  the 
vice-presidency.  M.  P.  Buol  now  fills  the 
office  of  cashier. 

— The  capital  stock  of  the  Sylvan  State 
Bank,  Sylvan  Grove,  Kansas,  has  been  in- 
creased from  ten  to  twenty  thousand  dol- 
lars. During  the  elapsed  half  year  this 
bank  has  been  very  successful  and  its  busi- 
ness has  been  good  enough  to  warrant  the 
increase  of  capital.  It  is  officered  by  the 
following  men:  A.  R.  Buzick,  president; 
John  Calene,  vice-president;  H.  S.  Buzick, 
Jr.,  cashier;  W.  H.  Breihan,  assistant 
cashier. 

— After  having  the  matter  under  advise- 
ment for  same  time,  a decision  has  been 
reached  by  the  directors  of  the  Exchange 
National  Bank  of  Colorado  Springs,  Colo., 
to  erect  a modem  sky-scraper  of  steel  and 
stone  on  the  location  now  occupied  by  the 
bank  at  the  southwest  corner  of  Pikes  Peak 
avenue  and  Tejon  street.  The  building  will 
be  the  largest  and  most  modern  business 
block  in  the  city  and  will  cost  upwards  of 
$300,000. 

It  is  the  intention  to  hove  it  six  or  seven 
stories  in  height,  of  the  most  modern  de- 
sign and  construction,  fire-proof  in  every 
respect  and  built  largely  of  steel  and  brick. 
Details  of  design  and  construction  will  be 
left  to  the  architects  and  builders. 

— Two  of  the  banks  of  Rawhide,  Nevada, 
the  Bank  of  Rawhide  and  the  Merchants 
and  Miners’  Bank,  have  consolidated  and 
thereby  perfected  one  of  the  strongest  com- 
binations in  the  state. 

This  is  a.  preliminary  step  toward  the 
transformation  into  a national  bank,  for 
which  a charter  has  already  been  applied 
under  the  title  of  Merchants  and  Miners’ 
National,  and  the  conversion  will  undoubt- 
edly be  accomplished  this  summer. 

Yolney  B.  Leonard  will  be  president  of 
the  new  bank  and  Charles  A.  Gehrman  first 
vice-president.  The  large  quarters  now  oc- 
cupied by  the  Bank  of  Rawhide  will  be 
still  further  enlarged  and  a modern  fire- 
proof vault  such  as  is  m use  in  the  larger 
cities  be  added,  besides  other  increased 
facilities  for  transacting  banking  business. 

— On  July  27  and  28  the  fifth  annual 
convention  of  the  Montana  Bankers’  Asso- 
ciation will  convene  at  Billings,  Montana. 
An  excellent  program  has  been  arranged 
and  many  prominent  bankers  throughout 
the  west  will  attend. 

—At  the  annual  convention  of  the  Na- 
tional Association  of  Credit  Men,  in  session 
at  Denver,  Colo.,  June  25,  the  special  com- 
mittee on  currency,  of  which  James  G. 
Cannon,  president  of  the  Fourth  National 
Bank  of  New  York,  made  a report,  which 


after  reviewing  the  course  of  financial  legis- 
lation at  the  last  session  of  Congress,  said: 

Doubtless  in  the  view  of  the  board  of  di- 
rectors who  created  your  Currency  Commit- 
tee. and  certainly  in  the  opinion  of  the 
committee,  it  is  the  duty  of  the  National 
Association  of  Credit  Men  to  get  an  under- 
standing of  currency  and  banking  problems, 
because  the  whole  credit  structure  which 
we  are  building  day  by  day  rests  upon  their 
proper  adjustment.  As  it  is  our  duty  and 
the  purpose  of  the  organization  to  work  for 
betterment  in  all  conditions  affecting  credit, 
the  currency  and  banking  system,  which  is 
as  important  to  credit  as  the  warp  to  the 
cloth,  cannot  by  any  excuse  be  neglected. 
The  association  should  recognize  that  the 
problems  our  present  system  presents  will 
not  work  out  their  own  solutions  and  that 
the  radical  differences  in  the  proposed  cures 
for  its  weaknesses  point  to  the  need  of 
earnest  deliberation  and  study  on  the  part 
of  the  entire  business  community.  The 
business  man  and  banker  have  a common 
interest,  each  as  great  as  the  other,  in  the 
solving  of  these  problems  and  must  unite  to 
understand  them,  and  the  National  Associa- 
tion of  Credit  Men,  bringing  together,  as  it 
does,  merchant,  manufacturer  and  banker 
is  already  well  equipped  to  take  up  this 
duty  and  perform  a splendid  service  for  the 
entire  country. 

We  have  no  desire  at  this  time  to  commit 
the  association  to  any  specific  currency 
plank.  It  is  to  our  minds  sufficient  if  we 
have  convinced  the  members  of  the  associa- 
tion of  their  duty  and  opportunity  and  di- 
rected them  into  a path  which  leads  towards 
such  a solution  of  our  currency  problems  as 
will  give  us  relief  from  these  disastrous 
panics  which  ruthlessly  destroy  our  great 
credit  structure. 

We.  therefore,  present  for  your  considera- 
tion the  following: 

Whereas,  The  currency  and  hanking  sys- 
tem of  the  country  is  at  the  foundation  «*f 
our  credit  system  and  upon  the  soundness 
of  the  currency  and  banking  law  the  safety 
of  the  country  from  unwholesome  expan- 
sions and  disastrous  reactions  largely  de- 
pend, and 

Whereas.  An  intelligent  and  educated 
public  opinion  regarding  banking  and  cur- 
rency is  requisite  for  the  enactment  of  laws 
which  shall  be  in  accord  with  sound  reason 
and  experience,  and 

Whereas,  The  National  Association  of 
Credit  Men  recognizes  that  it  is  its  dutv  to 
work  for  the  improvement  of  a system  which 
so  deeply  affects  the  credit  interests  of  the 
business  community,  be  it 

Resolved.  That  the  National  Association  of 
Credit  Men  shall  continue  its  Special  Cur- 
rency Committee  under  the  name  “Special 
Banking  and  Currency  Committee.”  and  ar- 
range at  the  convention  of  1909  by  amend- 
ment to  the  constitution  to  place  the  com- 
mittee among  its  standing  committees,  and 
further  be  it 

Resolved.  That  the  local  associations  be 
requested  to  appoint  banking  and  currency 
committees  to  consist  of  five  members, 
three  from  the  merchant  members  and  two 
from  the  banking  members,  these  commit- 
tees to  work  in  conjunction  with  the  Na- 
tional Banking  and  Currency  Committee,  to 
bring  about  a more  thorough  co-operation 
between  commercial  and  banking  interests 
to  the  end  that  there  may  be  aroused  a 
sounder  and  more  intelligent  understanding 
of  currency  and  banking  questions. 


— Since  February  29,  1908,  the  state 
banks  of  Oklahoma  have  gained  $2,355,609 
in  individual  deposits  and  $204,170  in  un- 
divided profits. 

This  report  speaks  well  for  the  future  of 


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149 


profitable  banking  in  the  pew  state  and  in- 
dicates that  the  new  state  is  second  to 
none  when  it  comes  to  getting  new  busi- 
ness. 

— The  Wallace  (Idah*i)  Banking  and 
Trust  Company  was  recently  converted  into 
a national  bank,  and  is  now  conducting  its 
large  business  under  the  name,  the  Wal- 
lace National  Bank.  It  is  capitalized  for 
$50,000  and  officered  as  follows: 

President,  H.  F.  Samuels;  vice-president, 
T.  N.  Barnard;  cashier,  F.  C.  Norbeck;  and 
assistant-cashier,  L.  R.  Adams. 

— R.  Lewis  Rutter,  secretary  of  the  Spo- 
kane & Eastern  Trust  Company,  has  been 
elected  president  of  the  First  State  Bank 
of  St.  Joe,  Idaho.  The  other  officers  are: 
Vice-president,  A.  W.  Holmes,  St.  Joe; 
cashier,  E.  G.  Ranney.  The  bank  will 
open  for  business  in  the  near  future. 

— The  Globe  (Arizona)  National  Bank, 
which  closed  its  doors  November  4,  after 
a run  lasting  several  days,  has  reopened, 
prepared  to  pay  all  depositors.  The  bank's 
capital  is  $50,000. 

PACIFIC  STATES. 

— At  a special  meeting  in  London,  June 
15,  of  the  shareholders  of  the  London,  Paris, 
and  American  Bank,  Limited,  which  has  a 
capital  of  $5,000,000,  voluntary  liquidation 
was  decided  upon  for  the  concern.  The 
assets  will  be  sold  to  a new  bank,  to  be 
called  the  London  and  Paris  National  Bank 
of  San  F rancisco,  which  is  to  be  incor- 
porated under  the  laws  of  the  United 
States,  with  a capital  of  $2,500,000. 

Nearly  ninety  per  cent,  of  the  capital  of 
the  bank  now  being  wound  up  is  held  in 
California,  and  the  desirability  of  recon- 
structing the  company  under  American  laws 
had  been  urged  by  the  larger  shareholders. 

— On  June  1,  the  First  National  of  Oak- 
land, Cal.,  opened  their  beautiful  new  eight- 
story  building  at  Broadway,  San  Pablo 
avenue  and  Fourteenth  street.  The  new 
quarters  are  said  to  be  a veritable  palace 
of  splendid  marble,  mahogany  and  old 
bronze,  and  as  complete  and  modern  as 
any  in  the  city  or  state. 

They  include  the  main  counting  room, 
executive  offices,  ladies'  waiting  room,  safe- 
deposit  vaults,  and  mezzanine  gallery  for 
the  bookkeepers,  all  conveniently  arranged 
and  semi-private. 

The  First  Trust  and  Savings  Bank  has 
its  quarters  on  the  San  Pablo  avenue  side 
of  the  main  floor  and  is  under  the  same 
management  and  control  as  the  First  Na- 
tional but  has  its  own  capital  and  its  func- 
tions are  entirely  separate  from  those  of 


the  national  bank.  The  present  official 
staff  of  the  bank  is  as  follows: 

P.  E.  Bowles,  president. 

L.  C.  Morehouse  and  L.  G.  Burpee,  vice- 
presidents. 

E.  N.  Walter,  cashier. 

C.  N.  Waiter  and  S.  H.  Kito,  assistant- 
cashiers. 

— All  the  deposits  of  the  Manhattan  Sav- 
ings Bank  of  Los  Angeles,  Cal.,  have  been 
purchased  by  the  Home  Savings  of  Los 
Angeles  and  will  be  added  to  its  business 
at  Broadway  and  Mercantile  place.  The 
Manhattan  had  a capital  of  $50,000  and  de- 
posits of  $90,000. 

The  Home  Savings  Bank,  which  ranks 
with  the  conservative  banks  of  Los  Angeles, 
has  a capital  of  $200,000  and  deposits  of 
about  $700,000.  Its  growth  and  success  has 
been  very  marked  since  its  organization  four 
years  ago,  and  from  present  indications 
the  growth  has  not  stopped. 

— Sixty-five  men  are  engaged  on  the  new 
Berkeley  (Cal.)  National  Bank  building 
and  with  the  close  of  each  day  the  progress 
over  the  day  before  is  noticeable. 

The  Utah  sandstone  which  will  face  the 
building  for  the  first  two  stories  has  ar- 
rived and  the  first  tier  has  been  laid  to 
mark  the  lines  which  the  masons  will  build 
it.  This  stone  is  of  a rare  quality  and  of 
a color  that  is  not  dazzling  to  the  eye,  yet 
is  pure  white,  with  just  enough  of  the  bluish 
tint  to  deaden  the  blinding  glare  that  is  the 
chief  objection  to  the  pure  white.  The 
upper  stories  will  be  faced  with  white  terra- 
cotta and  the  building  will  present  an  im- 
posing appearance  when  completed. 


The 

Berlitz  School 

of 

Languages 

MADISON  SQ.,  1122  BROADWAY 

Harlem  Branch,  3S8  Lenox  Are., 
cor.  126th  St. 

Brooklyn  Branch.  73  Court  St. 

Newark  Branch,  Scheucr  B'ldg. 
Brandies  in  over  250  leading  cities 
Summer  School  Asburjr  Park,  N.  J. 

Hotel  Touraine  Annex 
Fifth  Av.  near  Grand 

Teachers  sent  all  points  of  Jersey  Coast. 
Day  and  Evening  Lessons,  In  Classes  or 
Privately,  at  School  or  at  Besldenoe. 

AWARDS 


Paris  exposition, 

1900, 

2 Gold  Medals 

Lilli  “ 

1902, 

. Gold  Mrdal 

ZURICH 

1902, 

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St.  Louis  “ 

1904, 

. gold  Medal 

LIBGB  “ 

1905, 

. Gold  Medal 

Digitized  by  LaOOQLe 


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THE  BANKERS  MAGAZINE. 


Special  attention  is  being  paid  to  the 
vault  which  is  being  built  in  the  basement 
of  the  building.  The  structure  will  be  of 
solid  concrete,  reinforced  by  steel  rails. 
Inside  of  this  will  be  the  steel  vault  and 
deposit  boxes.  The  construction  of  the 
vault  is  calculated  to  be  both  fire  and  burg- 
lar proof.  Entrance  to  this  department 
will  be  effected  by  means  of  winding  stairs 
which  will  be  located  at  the  corner  of  the 
building. 

— The  Overland  Bank  of  Auburn,  Cal., 
was  formally  organized  June  9,  by  electing 
its  officers  for  the  ensuing  year.  The  or- 
ganizers of  the  bank  are  A.  Shadbolt,  of 
South  Dakota ; G.  W.  Brundage,  recently 
of  the  Central  Bank,  Oaklahd,  and  the  fol- 
lowing from  Auburn:  J.  E.  Walsh,  B.  B. 
Deming,  W.  F.  Jacobs,  G.  W.  Brundage, 
J.  B.  Landis,  S.  G.  Watts.  The  following 
are  the  officers  who  were  chosen:  A.  Shad- 
bolt,  president;  S.  G.  Wafts,  vice-president; 
G.  W.  Brundage,  cashier. 

The  bank  opens  in  temporary  quarters, 
with  a capital  stock  of  $25,000,  but  expects 
to  erect  a handsome  building  in  the  near 
future. 

— A certificate  authorizing  the  Seaboard 
Bank  of  San  Francisco  to  operate  as  the 
Seaboard  National  Bank  was  issued  by 
the  Treasury  Department  on  May  22.  The 
bank’s  capital  remains,  as  before  the  con- 
version, at  $250,000. 

— Few  of  the  smaller  banking  corpora- 
tions in  Southern  California  can  boast  of 
a handsomer  building  than  the  one  which 
has  been  erected  for  the  First  National 
Bank  of  South  Pasadena.  The  building  is 
on  the  southwest  comer  of  Mission  street 
and  Diamond  avenue.  It  is  one  story  high 
and  of  pressed  brick  construction. 

The  principal  banking  room  fronts  on 
Mission  street,  and  back  of  this  is  the  sav- 
ings department  and  the  safe  deposit  vaults. 
In  addition  to  these  the  building  contains 
handsome  private  offices  and  rooms  for  the 
meetings  of  the  directors.  All  the  furnish- 
ings are  in  mahogany. 

The  bank  was  established  about  three 
years  ago  as  a private  institution,  but  a 
few  months  ago  a national  bank  charter 
was  taken  out.  Jonathan  S.  Dodge  is  the 
president,  and  George  W.  Lawyer,  cashier. 

— A condensed  report  made  to  the  Comp- 
troller by  the  American  National  Bank  of 
San  Francisco  shows  that  bank  to  have  had 
on  May  14,  deposits  of  $5,286,164  and  cash 
and  exchange  to  the  amount  of  $1,996,239. 

These  figures  represent  an  increase  of 
business  that  is  very  encouraging  to  those 
interested  in  the  bank. 

— Theo.  Reichert,  heretofore  vice-presi- 
dent, has  been  advanced  to  the  presidency 


of  the  United  States  National  Bank  of  San 
Francisco,  succeeding  C.  A.  Hawkins. 

—On  June  18,  19  and  20,  the  thirteenth 
annual  convention  of  the  Washington 
Bankers’  Association  convened  and  held  its 
sessions  in  the  city  of  North  Yakima. 

A program  replete  with  interesting  and 
unusual  features  was  enjoyed  by  all  the 
members  and  a large  number  of  out-of-the- 
state  visitors. 

— What  will  be  known  as  one  of  the 
strongest  banks  on  the  Pacific  coast  has 
been  incorporated  at  Portland,  Oregon, 
under  the  name  Ladd  and  Tilton  Bank. 

Founded  by  W.  S.  Ladd  in  1859  and 
since  that  time  known  as  the  Bank  of  Ladd 
flnd  R hflS  grown  from  modest  be- 

ginnings to  its  present  proportions. 

The  new  institution  will  have  a paid-up 
capital  of  one  million  dollars,  with  a sur- 
plus and  undivided  profit  account  of  four 
hundred  thousand  dollars,  and  will  be 
officerer  as  follows:  William  M.  Ladd,  presi- 
dent; Edward  Cookingham,  vice-president; 
W.  H.  Dunckley,  cashier  and  secretary; 
Robert  S.  Howard,  Jr.,  J.  Wesley  Ladd, 
Walter  M.  Cook,  assistant-cashiers. 


CANADA. 


— Frank  W.  Strathy,  heretofore  manager 
of  the  Montreal  branch  of  the  Union  Bank 
of  Canada,  having  accepted  the  position  of 
manager  of  the  Traders*  Bank,  Toronto, 
has  been  replaced  at  Montreal  by  A.  S. 
Jarvis,  who  for  twenty  years  has  been  an 
officer  of  the  Union  Bank.  In  his  new 
position  an  excellent  opportunity  will  be 
afforded  him  to  put  his  experience  and 
ability  to  a fair  test. 


— Directors  of  the  Quebec  Bank,  at  the 
ninetieth  annual  meeting  of  the  stockholders, 
held  June  1,  presented  the  balance  sheet  of 
the  bank  and  its  profit  and  loss  account  for 
the  year. 

The  usual  quarterly  dividends  have  been 
paid  and  an  amount  of  $5,000  has  been  set 
apart  for  the  pension  fund  in  conformity 
with  a resolution  of  shareholders  to  that 
effect.  A special  reserve  of  $25,000,000  is 
made  to  cover  fluctuations  in  the  value  of 
securities  held,  and  owing  to  the  present 
uncertain  outlook  of  trade,  all  the  balance 
of  the  profits  is  transferred  to  profit  and 
loss  account. 

At  a meeting  of  the  directors,  held  im- 
mediately after  the  annual  meeting  John 
T.  Ross  was  elected  president,  and  Vesey 
Boswell  was  elected  vice-president. 

The  bank  has  been  ably  managed  and 
directed  by  Thomas  McDougall,  a banker 
of  wide  experience  and  knowledge. 


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WITH  BANKERS  MAGAZINE  ADVERTISERS 


IMPORTERS  AND  TRADERS  NA- 
TIONAL BANK. 

THE  July  1,  1908,  statement  of  the  Im- 
porters and  Traders  National  Bank 
of  New  York  is  a. most  satisfactory 
one.  The  total  resources  on  that  date  were 
$36,884,261.66,  as  against  $35,324,991.33  Jan. 
2,  1908.  During  the  same  period  the  de- 
posits increased  from  $26,631,604.58  to  $28.- 
026,559.17,  and  the  surplus  and  profits  from 
$8,643^86.75  to  $8,708,302.49.  Cash,  re- 
serve and  demand  loans  were  $16,279,116.75, 
against  $14,739,824.20  in  January. 

The  Importers  and  Traders  has  a very 
strong  directorate,  including  John  Ar- 
buckle,  of  Arbuckle  Brothers,  coffee;  Isaac 
D.  Fletcher,  chairman  American  Coal  Pro- 
ducts Co.;  Henry  C.  Hulbert,  formerly  of 
H.  C.  Hulbert  & Co.,  paper;  Henry  R. 
Ickeiheimer,  of  Heidelbach,  Iekelheimer  & 
Co.;  Adolph  I^ewisohn,  capitalist;  James 
R.  Plum,  of  James  R.  Plum  & Gale,  leath- 
er; H.  H.  Powell,  cashier;  Edward  C.  Rice, 
of  Rice,  Quinby  & Co.,  grain  and  flour; 
Edward  Townsend  president;  Edward  Van 
Volkenburgh,  formerly  of  P.  Van  Volken- 
burgh  & Co.,  dry  goods;  John  J.  Walton, 
of  Hunter,  Walton  & Co.,  produce,  and  P. 
B.  Worrall,  of  Fred.  Butterfield  & Co., 
dry  goods. 

Edward  Townsend  is  president,  and  H. 
H.  Powell,  cashier.  The  bank  will  shortly 
move  into  its  handsome  new  Broadway 
building. 


THE  MAKING  OF  BONDS. 

IN  a recent  number  of  its  beautiful  “Im- 
print,” the  American  Bank  Note  Co. 
gives  this  good  advice  about  the  mak- 
ing of  bonds: 

We  will  suppose  that  your  company  is  to 
put  out  a one  million  dollar  bond  Issue. 
The  bond  runs  fifty  years  and  pays  five  per 
cent,  interest.  Together  with  its  coupons  it 
therefore  constitutes  a negotiable  evidence 
of  debt  to  the  amount  of  three  and  one-half 
million  dollars.  Is  it  not  wiser  to  pay  a 
few  cents  more  per  bond  for  workmanship 
which  minimizes  the  possibility  of  counter- 
feiting than  to  effect  an  Inconsiderable  sav- 
ing by  accepting  inferior  protection? 

It  should  be  realized  that  the  coupons, 
when  due.  are  freely  negotiable.  The  bonds 
may  easily  come  into  the  hands  of  men 
whose  dishonesty  is  exceeded  by  nothing  but 
their  skill  at  profiting  by  it.  Such  a man 
might,  if  he  wished,  work  throughout  the 
entire  life  of  the  bond  in  an  effort  to  pro- 
duce a fac-simile.  To  safeguard  against 
such  attempts  requires  the  utilization  of 
eveTV  known  method  for  insuring  security. 

The  necessity  for  the  utmost  pains  in  this 
connection  is  but  half  appreciated  by  the 
average  corporation.  Alteration,  overissue 
or  fraudulent  duplication  of  their  bonds  will 
effect  both  themselves  and  the  holders. 


Security  is  the  indispensable  quality.  In- 
judicious economy  in  this  regard  is  likely  to 
result  in  that  which  will  severely  injure  a 
corporation’s  credit.  A poorly  prepared 
bond  becomes  a lasting  temptation  to  the 
unscrupulous. 


BIGGEST  SALE  OF  ADDING 
MACHINES. 

MR.  E.  ST.  ELMO  LEWIS,  advertising 
manager  of  the  Burroughs  Adding 
Machine  Co.,  gives  us  the  following 
information  about  what  is  said  to  be  the 
biggest  sale  ever  made  in  the  history  of 
the  adding  machine  business: 

Frank  A.  Munsey,  the  publisher  of  count- 
less periodicals  and  daily  newspapers,  who 
never  does  anything  except  on  an  extraor- 
dinary scale,  signed  an  order  the  other  day 
for  100  Burroughs  Adding  and  Listing  Ma- 
chines. 

All  of  these  machines  are  to  be  used  by 
the  Frank  A.  Munsey  Company  and  its  asso- 
ciated companies,  prominent  among  which 
is  the  great  Munsey  syndicate  of  retail  stores 
called  the  Mohican  Stores,  with  headquar- 
ters in  the  Flatiron  building.  New  York, 
which  also  houses  the  Munsey  publishing 
interests. 

The  Mohican  Stores  represent  a great  ad- 
vance in  retailing  methods,  and  the  system 
of  accounting  between  the  various  stores 
and  the  home  offices  is  unusually  complete. 
Among  other  things,  the  branch  managers 
make  out  daily  reports  to  the  home  offices 
which  would  require  a great  deal  of  time 
and  hard  work  if  handled  In  the  ordinary 
hand-and-mind  way.  By  using  the  Bur- 
roughs, however,  the  day’s  transactions  are 
recorded  on  the  report  sheets  and  duly  tabu- 
lated as  fast  as  an  operator  can  touch  the 
keys  and  move  the  lever.  A Burroughs  will 
be  installed  in  each  of  these  stores,  forming 
a part  of  the  equipment  as  important  as  the 
scales  or  cash  register. 


CERTIFICATION  OF  MUNICIPAL 
BONDS. 


THE  total  of  bonds  issued  under  the 
supervision  of  the  City  Trust  Co.  of 
Boston  now  amounts  to  nearly  $10,- 
000,000,  and  fifty-one  cities  and  towns  in 
various  parts  of  the  country  have  availed 
themselves  of  the  services  of  this  import- 
ant department.  Municipal  officers  are  now 
recognizing  the  fact  that  the  market  for 
their  securities  is  greaitly  strengthened  and 
broadened  by  being  certified  in  this  way. 
The  company  supervises  the  entire  process 
of  issuing  bonds,  including  their  engraving. 
All  the  leading  technicalities  are  properly 
looked  after,  and  the  company’s  certificate 
shows  that  the  bonds  are  genuine  and  that 
their  legality  has  been  approved  by  compe- 
tent attorneys,  so  that  the  whole  story  in 
connection  with  a certain  bond  issue  can 
be  had  at  short  notice  upon  application  to 
the  company. 


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NEW  BANKS,  CHANGES  IN  OFFICERS,  ETC 


NEW  NATIONAL  BANKS. 

The  Comptroller  of  the  Currency  furnishes  the  following  statement  of  new  National  banks  organised  since 

our  last  report. 


Applications  to  Organize  National  Banks 
Approved. 

The  following  notices  of  intention  to  organize 
National  banks  have  been  approved  by  the  Comptroller 
of  the  Currency  since  last  advice. 

Peoples  National  Bank.  Hot  Springs,  S.  D.; 
by  J.  F.  Parks,  et  al. 

Peoples  National  Bank,  Clintonville,  Pa.;  by 
H.  J.  Crawford,  et  al. 

Littletown  National  Bank,  Littletown,  Pa.; 

by  C.  P.  Gettier,  et  al. 

First  National  Bank,  Letcher,  S.  D. ; by  F. 
R.  Ward,  et  al 

First  National  Bank,  Monrovia,  Md.;  by 
M.  P.  Wood,  et  al. 

First  National  Bank,  Eustis,  Neb.,  by  L.  R. 
Ewart,  et  al. 

Commercial  National  Bank,  Cedar  Rapids, 
la.;  by  J.  L.  Bever,  Jr.,  et  al. 

First  National  Bank,  Coulee  City,  Wash.; 
by  A.  Kuhn,  et  al. 

First  National  Bank,  Mabton,  Wash.;  by  A. 
T.  Carlson,  et  al. 

Bridgeport  National  Bank,  Bridgeport,  Ala.; 

by  A.  A.  Lesueur,  Jr.,  et  al. 

First  National  Bank,  Hardin,  Miont.;  by 
John  B.  Arnold,  et  al. 

Citizens’  National  Bank,  Lamar,  Colo.;  by 
John  M.  Williams,  et  al. 

First  National  Bank,  Arenzville,  111.;  by 
George  Englebach,  et  al. 

Macomb  National  Bank,  Macomb,  111.,  by 
James  O.  Peasley,  et  al. 

First  National  Bank,  Ansonia,  Ohio;  by 
Henry  Schlemmer,  et  al. 

First  National  Bank,  Ramsey,  111.,  by  E.  J. 
Miller  et  al. 

First  National  Bank,  New  Paris,  Ohio;  by 
Sarah  Peelle,  et  al. 

City  National  Bank.  University  Place,  Neb.; 

by  E.  S.  Kirtland,  et  al. 

First  National  Bank,  Lemont,  111.,  by  H.  D. 
Baillet,  et  al. 


First  National  Bank,  Cainan,  Colo.;  by  R. 
C.  LaRue,  et  al. 

Luzerne  County  National.  Bank,  Wilkes- 
Barre,  Pa.,  by  George  K.  Powell,  et  al. 
Terre  Hill  National  Bank,  Terre  Hill,  Pa.; 
by  S.  F.  Foltz,  et  al. 

Harrington  National  Bank,  Harrington, 
Wash. ; by  A.  G.  Mitchum,  et  al. 

First  National  Bank,  Leland,  Miss.;  by  W. 

O.  Aldridge,  et  al. 

American  National  Bank,  Houston,  Tex.;  by 
W.  E.  Richards,  et  al. 

Manasquan  National  Bank.  Manasquan,  N. 

J.;  by  W.  J.  Couse,  et  al. 

Peoples’  National  Bank,  Mount  Pleasant,  Pa.; 

by  M.  J.  Kennedy,  et  al. 

First  National  Bank,  Bainbridge,  Pa.;  by  I. 
Oliver  Fly,  et  al. 

First  National  Bank,  Delano,  Cal.,  by  S. 
Mitchell,  et  al. 

First  National  Bank,  Highgrove,  Cal.;  by 
Stanley  J.  Castleman,  et  al. 

National  Bank,  Hudson,  Ohio.;  by  A,  H. 
Ditrick,  et  al. 

First  National  Bank,  Carson  City,  Nev.;  by 

P.  B.  Ellis,  et  al. 

Applications  for  Conversion  to  National  Banka 
Approved. 

Bank  of  Alameda.  Alameda,  Cal.;  into  Ala- 
meda National  Bank. 

Dexter  State  Bank,  Dexter,  Kans.;  into  First 
National  Bank. 

State  Bank,  Adams,  Neb.;  into  First  Na- 
tional Bank. 

Tilden  State  Bank,  Tilden,  Neb.;  into  First 
National  Bank. 

Shelton  Bank,  Shelton,  Neb.;  into  Shelton 
National  Bank. 

Forest  City  Bank,  Forest  City,  N.  C.;  into 
First  National  Bank. 

Farmers’  Bank  Co..  Arcanum,  O.;  into 
Farmers’  National  Bank. 


V 7 11  Tt ANY  of  the  largest  and  most  progressive  banks  in  the  United 

\ [==  IV1  States  to  day  are  using  the  ELLIOTTFISHER 

\nl/  ADDING  TYPEWRITER 

V / in  their  transit  departments  for  writing  collection  and  remittance 

letters.  There  are  good  reasons  for  it. 

It  does  the  work  in  half  the  time  it  can  be  done  by  any  other  method,  with  less 
labor  and  unerring  accuracy. 

The  letters  are  typed  in  duplicate  each  letter  being  added  as  written  and  the  total 
of  all  letters  for  the  day  obtained  with  the  last  stroke  of  the  key, 

ALL  IN  ONE  OPERATION 
q Besides,  there  is  no  other  entirely  satisfactory  way  of  handling  transit  Items. 

List  of  Prominent  Users  and  sample  letter , 37,  furnished  free  on  request. 

ELLIOTT-FISHER  COMPANY 

General  Offices  and  Factory,  HARRISBURG,  PENNSYLVANIA 

Sales  Offices  Throughout  The  'World 


Digitized  by 


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Capital,  • • $2,000,000.00 

Sarpln  ft  Profits,  1,000,000.00 
DipositS,  - - 25,000,000.00 


Cleveland,  Ohio. 


ACCOUNTS  SOLICITED. 
CORRESPONDENCE  INVITED. 
COLLECTIONS  I SPECIALTY. 


First  Bank.  Hermiston,  Orcg.;  into  First 
National  Bank. 

Bankers  & Lumbermen’s  Bank,  Portland, 
Oreg.;  into  Lumbermen’s  National  Bank. 
Citizens’  Bank  & Trust  Co.,  Chattanooga, 
Tenn.;  into  Citizens’  National  Bank. 
Kosse  State  Bank,  Kosse,  Tex.;  into  First 
National  Bank. 

Glenville  Banking  & Trust  Co.,  Glenville,  W. 
Va.;  into  Glenville  National  Bank. 

National  Banka  Organized. 

3137 —  Shelbfna  National  Bank.  Shelbina,  Mo.; 
Capital,  $30,000;  Pres..  J.  H.  Wood;  Vice- 
Pres..  Jas.  E.  Ragsdale;  Cashier,  W.  H. 
Jones;  Asst.  Cashier.  Geo.  W.  O’Bryan. 
Conversion  oT  Farmers  & Merchants’  Bank. 

3138 —  City  National  Bank.  Wymore,  Neb.; 
capital.  $50,000;  Pres..  Chas.  G.  Anderson; 
Vice- Pres..  J.  A.  Reuling;  Cashier,  J.  S. 
Jones;  Asst.  Cashier,  E.  B.  Smith. 

3139 —  National  Bank,  Arendtsvllle.  Pa.;  cap- 
ital. $25,000;  Pres.,  S.  G.  Bucher;  Vice- 
Pres..  W.  E.  Wolff;  Cashier,  L.  H.  Rice. 

3140 —  United  States  National  Bank,  Superior, 
Wi».;  capital.  $100,000;  Pres.,*T.  S.  Beise- 
ker;  Vice-Pres.,  Peter  Eimon;  Cashier,  A. 
J.  Wentzel;  Asst.  Cashier,  T.  P.  Bruden. 
Conversion  of  Union  Commercial  and  Sav- 
ings Bank. 

9141 —  Seaboard  rational  Bank,  San  Fran- 
cisco, Cal.;  capital.  $250,000;  Pres.,  R.  J. 
Tyson;  Vice-Pres’s..  W.  H.  Marston  and 
H.  E.  Pennell;  Cashier.  J.  E.  Hall.  Con- 
version of  Seaboard  Bank. 

9142 —  First  National  Bank.  Pamna,  Tex.; 
capital.  $25,000;  Pres.,  J.  R.  P.  Sewell; 
Vice-Pres.,  T.  D.  Hobart;  Cashier.  B.  E. 
Finley. 

9143—  First  National  Bank,  Brownstown.  Ind.; 
capital.  $50,000;  Pres.,  Oscar  S.  Brooke; 
Vice-Pres..  Albert  H.  Daneke;  Cashier, 
Alex  Greger. 

9144—  Security  National  Bank,  Cheney.  Wash.; 
capital,  $25,000;  Cashier.  R.  H.  Macartney. 
Conversion  of  Cheney  State  Bank. 

9145 —  Hailey-  National  Bank,  Halley,  Ida.; 
capital.  $50,000;  Pres.,  J.  E.  Cosgriff;  Vice- 
Pres..  J.  C.  Fox;  Cashier,  H.  D.  Curtis; 
Asst.  Cashier,  A.  W.  Ensign. 

9146 —  First  National  Bank,  Harrisburg, 
Oreg. : capital.  $25,000;  Pres..  John  Som- 
merville;  Vice-Pres’s. , Wm.  H.  Pale  and 
J.  G.  Senders:  Cashier.  Geo.  J.  Wilhelm. 

9147 —  First  National  Bank.  Blackduck,  Minn.; 
capital,  $25,000;  Pres.,  F.  P.  Sheldon;  Cash- 
ier, E.  P.  Rice. 

9148 —  First  National  Bank,  Valley  Mills,  Tex.; 
capital,  $30,000;  Pres.,  W.  T.  McNeill;  Vice- 
Pres’s.,  T.  Simmons  and  J.  H.  Williams; 
Cashier,  H.  B.  Sears;  Asst.  Cashier,  C.  E. 
Duke. 

9149 —  National  Bank,  North  East.  Pa.;  cap- 
ital, $50,000;  Pres.,  R.  A.  Davidson;  Cash- 
ier, F.  M.  McDonald. 

9150—  National  Bank,  Oakesdale,  Wash.;  cap- 
ital. $25,000;  Pres..  F.  A.  Davis:  Vice- 
Pres’s.,  W.  A.  Rolfe  and  J.  L.  Taggart: 
Cashier,  N.  A.  Rolfe. 

9151—  San  Juan  County  National  Bank,  Farm- 
ington, N.  M.;  capital,  $25,000;  Pres.,  R.  P. 
Hopkins;  Vice-Pres.,  Otto  Behrend;  Cash- 
ier, W.  H.  Harrington. 

9152—  Citizens’  National  Bank,  Knightstown, 
Ind.;  capital,  $50,000;  Pres.,  L.  P.  Newby; 


Vice-Pres.,  Frank  J.  Vestal;  Cashier, 
Arthur  L.  Stage;  Asst.  Cashier,  Reginald 

L.  Bell. 

9153—  Commercial  National  Bank,  Madison, 
Wis.;  capital,  $200,000;  Pres..  Adolph  F. 
Menges;  First  Vice-Pres.,  Earnest  A.  Cur- 
tis; Second  Vice-Pres.,  Chas.  N.  Brown; 
Cashier,  A.  O.  Paunack. 

9154—  Peoples’  National  Bank,  Clintonville, 
Pa.;  capital,  $25,000;  Pres.,  C.  E.  Craw- 
ford; Cashier,  H.  J.  Crawford. 

9155 —  National  Bank  of  Commerce,  EH  Paso, 
Tex.;  capital,  $200,000;  Pres..  J.  H.  Nations; 
Vice-Pres’s.,  John  T.  McElroy  and  James 

M.  Goggin;  Cashier.  W.  L.  Tooley;  Asst 
Cashier,  T.  M.  Quebedeaux. 

9156 —  United  States  National  Bank,  Dinuba, 
Cal.;  capital  $25,000;  Pres.,  G.  W.  Wyllie; 
Vice-Pres’s.,  J.  H.  Ramm  and  M.  A.  Ben- 
nett; Cashier.  C.  C.  Threlkeld. 

9157 —  Burlingame  National  Bank.  Burlingame 
Kans.;  capital,  $25,000;  Pres.,  Chas.  Lvons, 
Vice-Pres.,  B.  E.  Pratt;  Cashier,  E.  J. 
Williams. 

9158 —  First  National  Bank.  Dinuba,  Cal.; 
capital,  $25,000;  Pres.,  F.  H.  Wilson;  Vice- 
Pres.,  E.  Seligman;  Cashier.  W.  J.  TVch- 
man;  Asst.  Cashier,  Clarence  Wilson. 
Conversion  of  Bank  of  Dinuba. 

9159—  First  National  Bank,  Winslow,  Ind.; 
capital,  $25,000;  Pres.,  Joel  Bailey;  Vice- 
Pres.,  Logan  Robling;  Cashier,  Elmer  W. 
Rust;  Asst,  cashier,  Chas.  W.  Bee.  Con- 
version of  Bank  of  Winslow. 

9160 —  First  National  Bank,  Edmond,  Kans.; 
capital.  $26,000;  Pres.,  S.  Larrick;  Vice- 
Pres.,  Alma  Larrick;  Cashier,  J.  E.  Larrick. 
Conversion  of  State  Bank. 

9161—  First  National  Bank,  Marlon,  N.  D.; 
capital,  $25,000;  Pres.,  B.  W.  Schouweiler: 
Vice-Pres.,  W.  H.  Cox;  Cashier,  Wesley  C. 
McDowell;  Asst.  Cashier,  Lewis  Baertsch. 
Conversion  of  First  State  Bank. 

9162 —  First  National  Bank,  Etowah,  Tenn.; 
capital,  $25,000;  Pres.,  Thos.  F.  Peck;  Vice- 
Pres.,  A.  B.  Bay  less;  Cashier.  W.  C.  Rey- 
nolds; Asst.  Cashier.  S.  M.  Waldrop. 

9163 —  First  National  Bank.  Bradford.  Ohio; 
capital,  $25,000;  Pres..  Jacob  E.  Deeter; 
Vice-Pres.,  Alfred  M.  Brant;  Cashier,  J.  A. 
Crowell. 

9164—  Union  National  Bank,  Charlotte.  N.  C. ; 
capital.  $100,000;  Pres..  T.  W.  Wade;  Vice- 
Pres.,  F.  B.  McDowell;  Cashier,  H.  M. 
Victor. 

9165—  First  National  Bank,  Roundup,  Mont  ; 

capital.  $25,000;  Pres.,  F.  M.  Wall;  Vice- 
Pres.,  R.  M.  Calkins;  Cashier.  C.  R. 

Cheney. 

9166 —  Peoples'  National  Bank,  Hot  Springs, 
S.  D.;  capital,  $25,000;  Pres..  J.  F.  Parks; 
Vice-Pres.,  S.  L.  Kirtley;  Cashier,  A.  C. 
Forney. 

9167 —  First  National  Bank,  Orosi.  Cal.;  cap- 
ital, $25,000;  Pres.,  O.  C.  Goodin;  Vice- 
Pres.,  Herman  Beinhorn;  Cashier,  W.  R. 
Plgg. 

9168 —  Commercial  National  Bank,  Cedar  Rap- 
ids, la.;  capital.  $100,900;  Pres.,  Jas.  L. 
Bever;  Vice-Pres.,  W.  C.  LaTourette; 
Cashier,  J.  L.  Bever,  Jr. 

9169 —  Macomb  National  Bank.  Macomb.  111.; 
capital,  $100,000;  Pres.,  J.  O.  Peasley; 
Vice-Pres.,  Q.  C.  Ward;  Cashier.  Geo.  H. 
Scott;  Asst.  Cashier,  Geo.  M.  Wells. 


Digitized  by ' 


154 


THE  BANKERS  MAGAZINE, 


9170 — First  National  Bank.  Brewster,  Wash.; 
capital,  $26,000;  Pres.,  L.  L.  Work;  Vlce- 
Pres.,  Amos  Tupper;  Cashier,  Roy  Dorothy. 


9171 — First  National  Bank,  Croton  on  Hud- 
son, N.  Y.;  capital,  $25,000;  Pres.,  Leslie 
R.  Palmer;  Cashier,  Fred  D.  Fox. 


NEW  STATE  BANKS,  BANKERS,  ETC. 


CALIFORNIA. 

Oakland — Bank  of  East  Oakland;  capital, 
$25,000;  Pres.,  Lloyd  M.  Robbins;  Vica- 
Pres.,  S.  S.  Austin;  Chshier,  Hamilton 
Stites. 

COLORADO. 

Evans — Farmers  & Merchants’  Bank  (suc- 
cessor to  Bank  of  Evans);  capital,  $12.- 
500;  Pres.,  Jno.  H.  Behrens;  Cashier,  E. 
W.  Balfour. 

IDAHO. 

American  Falls — Evans  State  Bank;  Pres.,  L. 
S.  Evans;  Vice-Pres.,  S.  N.  Morris;  Cash- 
ier, H.  C.  Allen. 

St.  Joe — FMrst  State  Bank;  capital,  $10,000; 
Pres.,  R.  L.  Rutter;  Vice-Pres.,  A.  W. 
Holmes;  Cashier,  F.  G.  Ranncy. 

ILLINOIS. 

Browning— Farmers  & Traders  Bank;  cap- 
ital $15,000;  Pres.,  C.  B.  Workman;  Vice- 
Pres.,  John  Schuetz;  Cashier,  L.  H.  Yeck. 

Rockbridge — Rock  Bridge  Bank;  capital,  $10,- 
000;  Pres.,  C.  W.  Holnback;  Vice-Pres., 
A.  Tendeck;  Cashier.  F.  A.  Saunders. 

Washburn — Peoples’  Bank;  capital,  $25,000; 
Pres.,  W.  G.  West;  Vice-Pres.,  J.  F.  Shep- 
ard; Cashier,  L.  F.  Shepard. 

Zion  City — First  State  Bank;  succeeded  Zion 
Citv  Bank;  capital.  $25,000;  Pres.,  Chapin 
A.  Day;  Vice-Pres.,  Wm.  G.  Finn;  Cashier. 
Duncan  G.  Bellows. 

IOWA. 

Luzerne — Luzerne  Savings  Bank;  capital  $12,- 
000;  Pres.,  A.  F.  Fatge;  Vice-Pres.,  H. 
A.  Radeke;  Cashier,  Martin  Studt. 

KANSAS. 

Englewood — Home  State  Bank;  capital,  $10,- 
000;  Pres.,  Fred  Taintor;  Vice-Pres..  Jake 
Lambert;  Cashier,  B.  D.  Dumbauld. 

MICHIGAN. 

Chelsea — Farmers  & Merchants’  Bank;  cap- 
ital, *25.000;  Pres.,  J.  F.  Waltrous;  Vico- 
Pres.,  Peter  Merkel;  Cashier,  P.  G. 
Schaible. 

Dowagiac — State  Savings  Bank;  capital,  $26,- 
000;  Pres.,  E.  Burt  Jenney;  Vice-Pres’4*., 
Harry  B.  Tuthill  and  Robt.  W’iley;  Cashier, 
C.  A.  Crawford. 

Port  Huron — W.  F.  Davidson. 

Shepherd — Central  State  Savings  Bank; 

capital,  $20,000;  Pres.,  C.  D.  Bell;  Vice- 
Pres.,  J.  L.  Upton;  Cashier,  Wm.  Ander- 
son; Asst.  Cashier,  J.  L.  Faunce. 


MINNESOTA. 

Borup — Security  State  Bank;  succeeded  Bank 
of  Borup;  capital,  $10,000;  F>res.,  L.  D. 
Foskett;  Cashier,  L.  L.  Larson. 

Delano — State  Bank;  capital,  $20,000;  Pres., 
H.  C.  Bull;  Vice-Pres.,  Wm.  Zlebarth; 
Cashier,  P.  O.  Skoglund. 

Garvin — Farmers’  State  Bank;  capital,  $10,- 
000;  Pres.,  M.  L.  Peterson;  Vice-Pres.,  T. 
P.  Lien;  Cashier,  F.  D.  Pinckney. 

MISSOURL 

Bynumvillo — Bank  of  Bynumville;  capital, 
$10,000;  Pres.,  J.  T.  Wilson;  Cashier,  P.  H 
Porter. 

Columbia — Central  Bank;  capital,  $36,000; 
Pres.,  W.  T.  Conley;  Vice-Pres.,  Geo.  B. 
Dorsey;  Cashier  Ira  T.  G.  Stone;  Asst. 
Cashier,  Allen  Park. 

Crocker — Crocker  State  Bank;  capital,  $5,- 
000;  Pres.,  T.  H.  Turpin;  Vice-Pres.,  H. 
A.  Claiborn;  Cashier,  Chas.  Ousley. 

Laclede — Allen  Benson  Banking  Co.;  capital* 
$10,000;  Pres..  E.  B.  Allen;  Vice-Pres.,  Ross 
Louden;  Cashier.  E.  E.  Benson;  Asst.  Cash- 
ier, M.  P.  Benson. 

NEBRASKA. 

University  Place — Citizens’  State  Bank;  cap- 
ital, $25,000;  Pres.,  A.  W.  Wells;  Vice- 
Pres.,  J.  F.  Spivey;  Cashier,  H.  K.  FYantz. 

NORTH  CAROLINA. 

Durham — Farmers  & Mechanics’  Bank;  cap- 
ital. $10,000;  Pres..  R.  B.  Fitzgerald;  Vice- 
Pres.,  John  Merrick;  Cashier.  W.  G.  Pear- 
son. 

Elk  Park — Citizens’  Bank;  capital,  $5,000; 
Pres..  A.  P.  Brinkley;  Vice-Pres.,  H.  T. 
Gorman;  Cashier,  W.  H.  Stapp. 

NORTH  DAKOTA. 

Blaisdell — Blaisdell  State  Bank;  capital,  $10.- 
000;  Pres..  P.  J.  Barry;  Vice-Pres.,  W.  J. 
Brugman;  Cashier,  J.  J.  Brugman;  Asst. 
Cashier,  B.  J.  Doran. 

Manning— Dunn  County  State  Bank;  cap- 
ital. $5,000;  Pres.,  W.  D.  Richards;  Vice- 
Pres.,  Robt.  Wilcox;  Cashier,  W.  P.  Owens. 
Stirum — Stirum  State  Bank;  capital.  $10,000; 
Pres.,  W.  H.  Cole;  Vice-Pres.,  W.  H.  Mal- 
inson;  Cashier,  E.  V.  Lahr. 

OKLAHOMA. 

Bessie — State  Bank;  capital,  $10,000;  Pres., 
R.  Behnke;  Vice-Pres.,  H.  A.  Wiens; 
Cashier.  H.  C.  Wallerstadt;  Asst.  Cashier. 
H.  B.  Wallerstadt. 

Fort  Towson — First  State  Bank;  capital.  $10,- 
000;  Pres.,  M.  F.  Bay  less;  Cashier.  H.  C. 
Wynn. 


57>e  NORTHERN 
CROWN  BANK 


BlU  Ollltl,  • • WIBBIPEB 

COLLECTIONS 

SOLICITED 


Every  description  of  Banking  Business  transacted  Correspondence  Incited 


Digitized  by  u-oocie 


DESIGNER  it 

BENJ.  F.  TRIPP 

ROUND  DOOR 

FIRE  and 

Dgnb  Vault  Enrrinnnr 

BURGLAR- PROOF 

DdiiK  iiii  engineer 

VAULTS 

VAULTS 

46  Cornhill,  Boston,  Mass. 

Telephone  6112  Main 

A SPECIALTY 

Kenton — Cimarron  County  Bank;  capital, 
$25,000;  Pres.,  H.  J.  Hammond;  Cashier, 
S.  H.  Rixey. 

Lawton — Oklahoma  State  Bank;  capital, 
$25,000;  Pres..  W.  H.  Quinette;  Vice- 
Pres’s..  Geo.  M.  Paschal  and  Guy  C.  Rob- 
ertson; Cashier,  A.  R.  McLennan. 

Mead — First  State  Bank;  capital,  $10,000; 
Pres.,  E.  P.  Blake;  Vice-Pres’s.,  T.  J. 
Hartman  and  R.  C.  Edelen;  Cashier,  Ben 
Fell. 

OREGON. 

Clatskanie — Clatskanie  State  Bank';  succeed- 
ed Clatskanie  Exchange  Bank;  capital,  $15,- 
000;  Pres..  C.  H.  Stockwell.  Sr.;  Vice- 
Pres..  J.  E.  Hall;  Cashier,  C.  H.  Stock- 
well.  Jr.;  Asst.  Cashier,  Agnes  Tichenor. 
Cove — Cove  State  Bank;  succeeded  Eastern 
Oregon  Trust  & Savings  Bank  of  La 
Grande;  capital,  $5,100;  Pres.,  Geo.  L. 
Cleaver;  Vice-Pres.,  Frank  Conley;  Cash- 
ier, G.  A.  Stock. 

SOUTH  CAROLINA. 

Calhoun  Falls — Bank  of  Calhoun  Falls;  cap- 
ital. $10,000;  Pres.,  B.  B.  Gossett;  Vlce- 
F*res..  Jas.  P.  Gossett;  Cashier,  H.  V.  G. 
. Cooley. 

SOUTH  DAKOTA. 

Meckling— Bank  of  Meckling;  capital,  $5,000; 
FTes..  E.  E.  Halstead;  Vice-Pres.,  H.  G. 
Taylor;  Cashier.  C.  S.  Hoekstra;  Assi. 
Cashier,  Will  F.  Mikesell. 


Carlisle;  Cashier,  Henry  H.  Houston;  Asst 
Cashier,  S.  B.  Brown. 

Bronson — Bronson  State  Bank;  capital,  $15  - 
000;  Pres.,  W.  C.  Arthur;  Vice-Pres.,  J N 
Lewis;  Cashier,  S.  L.  Moore. 

Friona — First  State  Bank;  capital,  $15  000* 
Pres.,  Geo.  G.  Wright;  Vice-Pres..  L.  H.’ 
Russell;  Cashier,  M.  R.  Dick. 

Hartley— Hartley  County  Bank;  succeeded 
First  Bank;  capital,  $15,000;  Pres..  G.  F. 
Atkinson;  Vice-Pres.,  R.  S.  Coon;  Cashier, 
J.  F.  Anderson. 

H^n?ieigh~City  Exchange  Bank;  capital. 
$10,000;  Pres.,  p.  Y.  Rea;  Vice-Pres.,  J. 
R.  Coker;  Cashier,  J.  N.  Board;  Asst 
Cashier,  J.  W.  Hanna. 

Nacogdoches — Farmers  & Merchants’  State 
Bank;  capital,  $25,000;  Pres.,  R.  D.  Whit- 
taker; Vice-Pres.,  Hollis  Mast;  Cashier, 
T.  H.  Nees. 


WASHINGTON. 

Blaine— Home  State  Bank;  capital,  $25,000; 
Pres.,  G.  A.  'Willison;  Vice-Pres.,  Paul  A 
Wolten;  Cashier,  O.  K.  Middleton. 


WISCONSIN. 

Menominee  Falls— Farmers  & Merchants* 
Bank,  capital,  $15,lw0;  Pres.,  Samuel  A. 
Connell;  vice-Pres..  Garvin  A.  Mace; 
Cashier,  Albert  H.  Eckhardt. 

CANADA. 


TEXAS. 


ONTARIO. 


Alvin — Citizens’  State  Bank;  capital,  $10,- 
000;  Pres.,  R.  H.  King;  Vice-Pres.,  J.  W. 


Lions  Head— Traders’  Bank;  Mgr.,  T.  H. 
Pringle. 


CHANGES  IN  OFFICERS,  CAPITAL,  ETC. 


, ALABAMA. 

Birmingham — Citizens  Savings  Bank;  W.  A. 
Porter,  Pres.;  B.  T.  Head  and  M.  Levy, 
Vice-Pres’s.  ^ 

ARIZONA. 

Douglas — First  National  Bank;  B.  A.  Pack- 
ard, Pres.,  in  place  of  George  Mitchell. 

Globe — Globe  National  Bank;  W.  A.  Holt, 
Pres.,  in  place  of  G.  S.  Van  Wagenen, 
Ernest  M.  White.  Vice-Pres.,  in  place  of 
J.  H.  Hamill;  Patrick  Rose.  Vice-Pres.; 
C.  M.  Cushman,  Asst.  Cashier,  in  place  of 
J.  R.  Todd. 

Safford — Bank  of  Safford;  D.  W.  Wicker- 
sham,  Pres.;  Geo.  A.  Olney,  J.  E.  Solomon 
and  J.  N.  Porter,  Vice-Pres’s.;  E.  W. 
Clayton,  Cashier;  J.  S.  Abbott,  Asst. 
Cashier. 

ARKANSAS. 

Hoxie— Bank  of  Hoxie;  J.  E.  Pringle,  Pres.; 
E.  P.  Richardson,  Vice-Pres.;  A.  G.  Ali- 
bright.  Cashier. 

Perry — First  National  Bank;  no  Cashier  in 
place  of  C.  E.  Thomas;  M.  M.  Creasey, 
Asst.  Cashier. 

CALIFORNIA. 

Los  Angeles — Bank  of  Los  Angeles;  merged 
with  Miners  and  Merchants’  Bank,  under 


former  title;  capital.  $200,000;  W.  B.  Ames, 
Pres.,  Jno.  A.  Pirtle,  Vice-Pres.;  A.  N. 
Lysle,  Cashier;  Ralph-  E.  Dobbs,  Asst. 
Cashier. — Home  Savings  Bank;  consolidat- 
ed with  Manhattan  Savings  Bank,  under 
former  title. 

San  Francisco — United  States  National  Bank; 
Theo.  Reichert.  Pres.,  in  place  of  C.  A. 
Hawkins;  Emile  Kahn,  Vice-Pres.,  in  place 
of  W.  F.  Gurbank. 

COLORADO. 

Aspen — Peoples’  National  Bank;  Henry  Beck, 
Vice-Pres.,  in  place  of  B.  R.  Kobey;  R.  C. 
Carr,  Cashier,  in  place  of  E.  F.  Pumphrey; 
no  Asst.  Cashier  in  place  of  G.  B.  Fol- 
som. 

Ault — First  National  Bank;  W.  W.  Brown, 
Vice-Pres.,  In  place  of  E.  T.  Dufffey. 
Boulder — National  State  Bank;  A.  W.  Border, 
Asst.  Cashier,  In  place  of  G.  C.  Pollock. 
La  Junta— First  National  Bank;  Chas.  D. 

Stewart,  Asst.  Cashier. 

Llmon — Limon  Bank;  title  changed  to  Limon 
State  Bank;  capital,  $16,000;  W.  H.  Wells, 
Vice-Pres. 

Palisades — Bank  of  Palisades;  W.  V.  Wright, 
Cashier,  in  place  of  D.  L.  Rusk,  deceased. 

Digitized  by 


156 


THE  BANKERS  MAGAZINE. 


CONNECTICUT. 

Hartford — Hartford  Clearing-House;  J.  G. 
Root,  Pres. 

New  Haven — New  Haven  Savings  Bank; 

Geo.  J.  Brush,  Vice-Pres. 

Winsted — Hurlbut  National  Bank;  R.  E. 
Holmes,  Pres.,  in  place  of  Henry  Gay;  W. 
T.  Batcheller,  Vice-Pres.,  in  place  of  R.  E. 
Holmes. 

DISTRICT  OF  COLUMBIA. 

Washington— Commercial  National  Bank;  A. 
G.  Clapham.  Third  Vice-Pres. — National 
City  Bank;  E.  Q.  Smith.  Pres.,  in  place  of 
P.  A.  Drury;  Edwd.  S.  Munford,  Vice- 
Pres.;  in  place  of  F.  T.  Sanner;  Edwd.  S. 
Munford,  Cashier,  in  place  of  A.  G.  Clap- 
ham;  John  Poole,  Asst.  Cashier,  in  place 
of  R.  E.  White. — United  States  Savings 
Bank,  J.  L.  Karrick,  Pres.;  Jas.  M.  Baker, 
Vice-Pres. 


GEORGIA. 

Augusta — Augusta  Clearing-House  Associa- 
tion; Patrick  Armstrong,  Pres. 

IDAHO. 

Caldwell — Western  National  Bank;  L.  R. 
Dille,  Cashier,  in  place  of  S.  D.  Simp- 
son. 

Cottonwood — First  National  Bank;  J.  A. 
Schultz,  Pres.,  in  place  of  E.  M.  Ehrhardt; 
Jacob  Matthiesen,  Vice-Pres.,  in  place  of 
W.  L.  Brown;  Geo.  M.  Robertson,  Cash- 
ier, in  place  of  Clyde  McGinitle. 


THE  BAND 

PATENT  BANK  LEDGERS 


ARE  USED  IN  EVERY 
STATE  OF  THE  UNION 

Write  for  Samples 
and  prices.  .* 


The  Rand  Company 

NORTH  TONAWANDA,  ::  N.  Y. 


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22  Cla;  St  SAN  FRANCISCO,  CAL. 


ILLINOIS. 

Chicago — Fort  Dearborn  National  Bank;  Wm. 
A.  Tilden,  Pres.,  in  place  of  L.  A.  God- 
dard.— Oakland  National  Bank;  title 
changed  to  Oakland  National  Bank  of 
Chicago. 

Freeport — State  Bank,  Frederich  Dorman, 
Pres.;  Henry  Baler,  Vice-Pres. 

German  Valley — German  American  State 
Bank;  H.  W.  Coffman,  Pres.;  L.  Van  Os- 
terlso.  Asst.  Cashier. 

La  Salle — La.  Salle  National  Bank;  Geo.  A. 
Wilson,  Pres.,  in  place  of  W.  B.  Hummer; 
Wayne  Hummer,  Asst.  Cashier. 

Le  Roy — First  National  Bank,  C.  E.  Cope, 
Asst.  Cashier. 

Lincoln — First  National  Bank;  Frank  Frorev. 
Pres.,  deceased. 

Paris — Citizens’  National  Bank;  Edw.  Lev- 
ings,  Pres.,  In  place  of  J.  W.  Snyder;  no 
Asst.  Cashier,  In  place  of  Edw.  Levings. 
Rock  Island — Rock  Island  National  Bank; 
W.  A.  Rosenfleld.  Vice-Pres.,  in  place  of 
Mary  E.  Robinson. 

Roodhouse — Roodhouse  Bank;  W.  P.  Gil- 
more. Pres.;  W.  H.  Barrow.  Vice-Pres.; 
C.  W.  Payne,  Cashier;  J.  R.  McCarthy, 
Asst.  Cashier. 


INDIANA. 

Andrews— Bank  of  Andrews;  title  changed 
to  State  Bank;  capital,  $25,000;  E.  M.  Was- 
muth.  Pres.;  John  Stouder,  Vice-Pres.;  R. 
O.  Bixby,  Asst.  Cashier. 

Huntingburg— First  National  Bank;  Loui3  J. 

Poetker,  Asst.  Cashier. 

Redkey — Bank  of  Redkey;  J.  S.  Pierce,  Pres., 
in  place  of  Geo.  N.  Edger. 

Seymour — Seymour  National  Bank;  H.  C. 
Johnson,  Pres.,  In  place  of  B.  F.  Price;  J. 
S.  Mills,  Cashier,  in  place  of  H.  C.  John- 
son. 

Shelburn— First  National  Bank;  J.  F.  Bol- 
inger.  Asst.  Cashier,  in  place  of  H.  V. 
Bolinger. 

Terre  Haute— Terre  Haute  National  Bank; 
F.  C.  Fisbeck,  Cashier,  in  place  of  War- 
ren Hussey. 

IOWA. 

Cedar  Rapids — Merchants’  National  Bank; 
Jas.  E.  Hamilton,  Vice-Pres. : J.  S. 

Broek8mit,  Cashier,  In  place  of  Jas.  E. 
Hamilton. 

Des  Moines— Citizens’  National  Bank;  Wm. 
W.  Maish,  Asst.  Cashier,  in  plaice  of  Geo. 
Cooper. 

Marshalltown — First  National  Bank;  C.  C. 
St.  Clair.  Cashier;  H.  Gerhart.  Asst.  Cash- 
ier; H.  S.  Lawrence.  Asst.  Cashier. 

Mount  Pleasant — First  National  Bank;  W. 
S.  Judy,  Cashier,  in  place  of  H.  J.  Twint- 
ing;  Fred  Van  How,  Asst.  Cashier,  in  place 
of  W.  S.  Judy. 

Ottumwa — First  National  Bank;  M.  B.  Hutch- 
inson, Vice-Pres..  in  place  of  Geo.  Haw. 
Prescott — First  National  Bank;  F.  A.  Outhier, 
Vice-Pres.,  in  place  of  B.  Newcomb;  B. 
Newcomb.  Cashier,  in  place  of  W.  G.  Per- 
kins; W.  G.  Perkins.  Asst.  Cashier. 

Silver  City — Silver  City  State  Bank;  M. 
Kehoe,  Cashier. 

Waterloo — Central  Bank;  title  changed  to 
Cushman  Central  Bank;  G.  A.  Doerfler, 
Vice-Pres.;  E.  G.  Doerfler,  Cashier;  A.  M. 
Cushman,  Asst.  Cashier. 

West  Grove — West  Grove  Rank ; title  changed 
to  West  Grove  Savings  Bank. 

KANSAS. 

Morland— Morland  State  Bank;  J.  B . Stanfill, 
Vice-Pres.,  in  place  of  W.  R.  Cunning- 
ham. 

Nortonville — First  National  Bank;  L.  B.  Me 
Bride,  Cashier,  in  place  of  J.  W.  HarrLs. 


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NEW  BANKS,  CHANGES,  ETC, 


ir>7 


Wichita — Fourth  National  Bank  and  National 
Bank  of  Wichita;  consolidated  under  form- 
er title. 


Saginaw — Commercial  National  Bank;  A.  W. 
Field,  Cashier,  in  place  of  M.  O.  Robinson; 
W.  L.  Paxson,  Asst.  Cashier. 


KENTUCKY. 

Lexington — Lexington  City  National  Bank; 
J.  W.  Stoll.  Pres.,  in  place  of  J.  S.  Stoll, 
deceased;  Jno.  G.  Stoll,  Vice-Pres. ; J.  E. 
McFiarland,  Cashier,  in  place  of  J.  W. 
Stoll. 

Louisville — Citizens’  National  Bank;  Webster 
Moore  and  Jos.  M.  Zahner,  Asst.  Cashiers. 
Mount  Sterling — Exchange  Bank  of  Ken- 
tucky; H.  R.  Prewitt,  Pres.;  B.  Frank 
Perry.  Cashier. 

Parts — Deposit  Bank;  R.  J.  Neely,  Cashier 
LOUISIANA. 

Marksville— Avoyelles  Bank;  J.  W.  Joffrion. 

Pres.,  in  place  of  E.  J.  Joffrion,  deceased. 
New  Orleans — Bank  of  Orleans;  Alfred  La 
Blanc,  Vice-Pres.,  in  place  of  Peter  E. 
Heliwege. 


MAINE. 

Augusta — First  National  Bank;  C.  S.  Hich- 
born.  Pres.,  In  place  of  L.  Titcomb,  de- 
ceased; T.  A.  Cooper,  Cashier,  in  place  of 
C.  S.  Hlchborn. 

Ndw  Oastle — New  Castle  National  Bank; 
Bradford  A.  White,  Pres.,  in  place  of  T.  C 
Kennedy. 

MARYLAND. 

Snow  Bill — Deposit  & Savings  Bank;  O.  M. 
Purnell,  Pres.,  in  place  of  Clayton  .1. 
Purnell,  deceased. 

MASSACHUSETTS. 

Boston — Merchants  National  Bank;  A.  B. 
Silsbee,  Pres.,  in  place  of  Howard  Stock- 
ton;  A.  P.  Weeks,  Vice-Pres.  and  Cashier. 
— National  Union  Bank;  Wm.  S.  B.  Stev- 
ens. Cashier,  in  place  of  G.  H.  Perkins. 
Leicester — Leicester  Savings  Bank;  Chas.  T. 
Munroe.  Pres.,  in  place  of  J.  O.  Murdock, 
resigned. 

Salem — Naumkeag  National  Bank;  E.  J. 
Fkbens.  Pres.,  in  place  of  A.  W.  West; 
no  Vice-Pres.,  in  place  of  E.  J.  Fabens. 

MICHIGAN. 

Detroit — First  National  Bank;  M.  L.  Wil- 
liams, Pres.,  in  place  of  John  T.  Shaw; 
John  T.  Shaw.  Vice-Pres.;  John  T.  Shaw, 
Cashier,  in  place  of  Frank  G.  Smith; 
Frank  G.  Smith,  W.  A.  McWhinnev  and  J. 
H.  Hart.  Asst.  Cashiers. — Peninsular  Sav- 
ings Bank;  capital  increased  to  $500,000. 
Durand — First  National  Bank;  F.  W.  Law- 
rence, Cashier. 

Flint— Genesee  County  Savings  Bank;  Jas. 
C.  Willson,  Pres.;  H.  C.  Spencer,  Vice- 
Pres. 

Newberry — Newberry  Bank;  title  changed  to 
Newberry  State  Bank;  capital,  $25,000;  F. 
P.  Bohn.  Pres.;  L.  H.  Feod.  Vice-Pres. 
Norway — Firs*  National  Bank;  William  Bond, 
Vice-Pres.,  in  place  of  L.  F.  Springer. 


MINNESOTA. 

Aitkin— First  National  Bank;  Freeman  E. 
Krech,  Vice-Pres..  in  place  of  A.  R.  David- 
son; John  A.  Healy,  Vice-Pres. 

Baudette — First  State  Bank;  John  Dahl- 
gren.  Cashier,  in  place  of  J.  R.  Severtson, 
resigned. 

Boyd— Boyd  National  Bank;  N.  A.  Rounlng, 
Cashier,  in  place  of  O.  H.  Bye;  A.  J.  Flaa, 
Asst.  Cashier,  in  place  of  U.  A.  Roun- 
lng. 

Flood  wood — Bank  of  Floodwood;  title  changed 
to  First  State  Bank;  capital.  $10,000:  M. 
H.  Schusseler,  Pres. ; A.  D.  Haish,  Vice 
Pres. 

Hardwick — Farmers’  State  Bank;  O.  M. 
Gravatt.  Cashier.  In  place  of  D.  J.  Ross, 
resigned;  A.  E.  Lemke,  Asst.  Cashier. 

Minneapolis — Northwestern  National  Bank; 
merged  with  National  Bank  of  Commerce, 
under  former  title. 

Morton— Bank  of  Morton.;  title  changed  to 
Stnto  Bank 

St.  James— Citizens’  National  Bank;  J.  A. 
Sundt,  Cashier,  in  place  of  H.  M.  Serk- 
land. 

Two  Harbors— Bank  of  Two  Harbors;  title 
changed  to  Commercial  State  Bank;  capi- 
tal. $25,000;  John  Dwan,  Vice-Pres.;  H.  B 
Perry.  Asst.  Cashier. 

Wens — First  National  Bank;  Geo.  L.  Schmita 
Asst.  Cashier. 


MISSISSIPPI. 


Heidelberg— Jasper  County  Bank;  J.  S.  Mor- 
gan. Cashier,  In  place  of  C.  A.  Ferrell, 
resigned. 

Natchez — Britton  & Koontz  Bank;  A.  B. 
Learned  and  F.  C.  Martin.  Vice-Press.; 
C.  B.  Richardson.  Jr.,  Cashier. 

MISSOURI. 


Altamont — Citizens  State  Bank;  J.  U.  De 
Golia,  Cashier,  in  place  of  J.  T.  Hudson. 
Bosworth — k irst  National  Bank;  C.  F.  Wur- 
ster.  Cashier,  in  place  of  O.  G.  Kinsey. 
Lockwood — Farmers’  State  Bank;  C.  S.  Ring. 
Pres.;  L.  F.  Evans,  Vice-Pres.;  U.  S. 
Keran,  Cashier;  W.  E.  Evans,  Asst.  Cash- 


ier 

Maplewood— Bank  of  Maplewood;  R.  A. 

Swink.  Pres.;  A.  J.  Crum.  Cashier. 

St  Louis— Grand  Avenue  Bank;  Francis  A. 
Drew.  Pres.,  in  place  of  E.  E.  Magill.  re- 
signed. 

MONTANA 


Ismay— First  National  Bank;  Wilson  Eyer, 
Cashier,  in  place  of  James  Hunter. 


NEBRASKA. 

Beatrice — Beatrice  National  Bank;  W.  Rob- 
ertson, Cashier,  In  place  of  H.  H.  Waite; 
D.  W.  Cook,  Jr.,  Asst.  Cashier. 


AT 

This  National  Bank  is  at  the  National  Capital 
and  is  right  under  the  eye  of  the  National  Bank- 

AMERICAN 

THE 

ing  Department.  It  is  a designated  depositary 
of  the  United  States,  and  buys  and  sells  United 

NATIONAL 

NATIONAL 

States  bonds.  Its  Capital  Is  $500,000,  and  its 
Surplus  and  Profits,  $200,000.  It  acts  as  agent  for 

BANK, 

National  Banks  before  the  Treasury  Department 

CAPITAL 

and  solicits  your  business. 

R.  H.  LYNN,  President. 

Washington,  D.  G. 

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THE  BANKERS  MAGAZINE 


Edgar— Clay  County  State  Bank;  C.  A.  Voor- 
hees,  Pres.;  F.  A.  Voorhees,  Cashier;  J.  W. 
McCue,  Asst.  Chshier. 

Elmwood— First  National  Bank;  Floyd  L. 
Woolcott.  Vice-Pres.;  Edw.  J.  Jeary,  Cash- 
ier, in  place  of  Floyd  L.  Woolcott;  no  Asst 
Cashier  in  place  of  Edw.  J.  Jeary. 

Friend — Merchants  & Farmers’  Bank;  C.  E. 
Bowlby,  Vice-Pres. 

O’Neill — O’Neill  National  Bank;  O.  O.  Sny- 
der. Vice-Pres.;  S.  J.  Weeks,  Cashier,  in 
place  of  J.  F.  O’Donnell. 

Pllger — Firs*  National  Bank;  J.  A.  Schaberg, 
Cashier,  in  place  of  R.  O.  Brandt. 

NEW  HAMPSHIRE. 

Fhrmlngton — Farmington  Savings  Bank;  B. 
F.  Perkins,  Vice-Pres. 


NEW  JERSEY. 

Burlington— Mechanics  National  Bank;  no 
Pres,  in  place  of  Nathan  Haines,  deceased. 
Lambertville — Lambertville  National  Bank; 
Frank  A.  Phillips,  Cashier,  in  place  of  J. 
P.  Smith;  Jas.  S.  Studdiford,  Asst.  Cash- 
ier. 

Newark — City  Trust  Co.;  F.  W.  Hannahs, 
Pres.,  in  place  of  Chas.  Colyer.  resigned. 
Newton — Sussex  National  Bank;  Theodore 
Simonson,  Pres.,  in  place  of  Theo.  Morford, 
deceased. 


NEW  MEXICO. 

Cutter — First  National  Bank;  L.  Clapp, 
Cashier,  in  place  of  J.  A.  Reed. 


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Nara  Visa— First  National  Bank;  D.  L.  Bu- 
chanan, Asst.  Cashier,  in  place  of  O.  O 
Gragg. 

Texico— First  National  Bank;  Wm.  Harvey 
Cashier,  in  place  of  A.  A.  Maxwell. 

' NEW  YORK. 

Auburn — National  Bank;  G.  B.  Longstreet* 
Pres.,  in  place  of  E.  H.  Avery;  no  Cashier 
in  place  of  G.  B.  Longstreet;  Chas.  F. 
Stupp,  Asst.  Cashier. 

Bath— Farmers  & Mechanics’  Bank;  Frank 
Campbell,  Pres.;  W.  R.  Campbell.  Vice- 
Pres.;  Fred  R.  Webster,  Cashier. 

Illon — Ilion  National  Bank;  Geo.  H.  Watson, 
Cashier,  in  place  of  C.  F.  Comstock. 
Jamestown— Farmers  & Mechanics  Bank;  O. 
N.  Rushworth.  Pres.;  C.  A.  Okerlind. 
Cashier. 

Lake  George— First  National  Bank;  E.  R. 
Ziebach,  Vice-Pres.,  in  place  of  A.  B.  Col- 
vin. 

New  York  City — Chase  National  Bank;  S.  H. 
Miller,  Cashier,  in  place  of  E.  J.  Stalker; 
H.  M.  C'onkey  and  A.  C.  Andrews,  Asst. 
Cashiers. — Chelsea  Exchange  Bank;  cap- 
ital increased  to  $400, *„<). — Corn  Exchange 
Bank;  J.  P.  Dunning,  Vice-Pres. — Grannis 
& Lawrence;  title  changed  to  Langley  & 
Lawrence. — Metropolitan  Trust  Co.;  Geo. 
N.  Hartmann,  Secy.,  in  place  of  Jacob  C. 
Klinck,  resigned. — Walsh  & Floyd;  James 
W.  Walsh,  deceased. — Northern,  Riverside 
and  Hamilton  Banks,  consolidated,  under 
title  of  Northern  Bank. 

NORTH  CAROLINA. 

Jefferson — First  National  Bank;  W.  C.  Greer. 
Pres.,  in  place  of  T.  H.  Sutherland;  J.  J. 
Thomas,  Vice-Pres.,  in  place  of  W.  C. 
Greer;  Harry  Proctor,  Asst.  Cashier. 

OHIO. 

Cambridge — Guernsey  National  Bank;  J.  W. 
Scott.  Cashier,  in  place  of  A.  A.  Taylor; 
no  Asst.  Cashier,  in  place  of  ’J.  W.  Scott. 
Centerburg — First  National  Bank;  T.  D.  Up- 
dike. Vice-Pres.,  in  place  of  J.  K.  Daiden. 
deceased. 

Cincinnati — Fifth  National  Bank;  title 
changed  to  Fifth-Third  National  Bank;  W. 
A.  Lemmon,  Vice-Pres..  in  place  of  J.  M. 
Glenn;  Edw.  Seiter.  Vice-Pres.;  Monte  J. 
Goble.  Cashier,  in  place  of  Edw.  Seiter; 
C.  T.  Perin.  Asst.  Cashier,  in  place  of 
Monte  J.  Goble;  L.  E.  Van  Ausdol  and  F. 
J.  Mayer,  Asst.  Cashiers. 

Cleveland — Citizens  Savings  & Trust  Co. 
absorbed  Commercial  Savings  & Trust  Co., 
under  former  title. — Cleveland  Trust  Co.; 
F.  H.  Goff,  Pres.,  in  place  of  Calvary 
Morris. 

Croton — Croton  Bank,  H.  B.  Busier,  Pres.: 
W.  A.  Ashbrook,  Casnier;  C.  L.  McCraken 
Fostoria— Commercial  Bank  & Savings  Co.: 
Chas.  Ash.  Pres.;  C.  A.  Gribble.  Cashier; 
C.  W.  Latshaw.  Asst.  Cashier. 

Loveland — First  National  Bank;  Chas.  Lock- 
wood.  Cashier,  in  place  of  R.  I.  Peak; 
Mr.  Lockwood  continues  as>  Second  Vice- 
Pres.;  no  Asst.  Cashier  in.  place  of  H.  B. 
Peak. 

Lowell — First  National  Bank;  O.  O.  Kinsey, 
Cashier,  in  place  of  H.  J.  Hoflfer. 

Marietta — German  National  Bank;  W.  J. 
Speer,  Cashier,  in  place  of  S.  L.  Augle; 
C.  H.  Nixon,  Asst.  Cashier,  in  place  of  W. 
J.  Speer. 


OKLAHOMA. 

Bartlesville — Bartlesville  National  Bank;  R. 
L.  Beattie,  Pres.,  in  place  of  Wm.  John- 
stone; Ola  Wilhite,  Vice-Pres.,  in  place  of 


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NEW  BANKS,  CHANGES,  ETC, 


159 


“Fifty  Years  in  Wall  Street” 

5y  HENRY  CLEWS 

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R.  J.  Renn;  G.  R.  McKinley,  Cashier,  in 
place  of  R.  L.  Beattie. 

Eldorado — Farmers  & Merchants  National 
Bank;  E.  S.  Goodlett,  Asst.  Cashier. 
Hartshome — First  National  Bank;  U.  E. 

Tuell,  Vice-Pres.,  in  place  of  F.  C.  Savage. 
Luther — National  Bank;  title  changed  to 
First  National  Bank. 

Muskogee — First  National  Bank;  Jack  L. 
Johnston,  Vice-Pres. 

Talequah — Cherokee  National  Bank;  F.  H. 
Gosman,  Jr.,  Cashier,  in  place  of  H.  B. 
Teehee. 

Wetumka— American  National  Bank;  E.  D. 
Hall,  Vice-Pres.,  in  place  of  Geo.  Appling. 

OREGON. 

Portland— Ladd  & Tilton;  title  changed  to 
Ladd  & Tilton  Bank:  W.  M.  Ladd.  Pres.; 
Edw.  Cookingham,  Vice-Pres.;  W.  H. 
Dunckley.  CashleT;  R.  L.  Howard,  Asst. 
Cashier. 

PENNSYLVANIA. 

Avonmore — First  National  Bank;  T.  P. 
Sturgeon,  Pres.,  in  place  of  G.  M.  Hlne;  G. 
M.  Hlne,  Cashier.  i~  place  of  C.  A.  Hill. 
Bradford — i irst  National  Bank;  W.  W.  Bell, 
Pres.,  in.  place  of  F.  W.  Davis. 

East  Stroudsburg — Monroe  County  National 
Bank;  J.  N.  Gish,  Cashier,  in  place  of  N. 

S.  Brittain;  N.  S.  Brittain,  Jr.,  Asst. 
Cashier. 

Homestead — First  National  Bank;  J.  H. 
Williams.  Pres.,  in  place  of  Louis  Rott; 
Chas.  W.  Ashley,  Vice-Pres.,  in  place  of  J. 
H.  Williams. 

Kittanning — Farmers  National  Bank;  Geo.  G. 
Titzell,  Cashier,  in  place  of.  G.  W.  Dover- 
spike;  Geo.  B.  Fleming,  Asst.  Cashier,  in 
place  of  Geo.  G.  Titiell. 

Mifflintown — Juniata  Valley  National  Bank; 
J.  Lloyd  Hartman,  Cashier,  in  place  of  T. 
Van  Irwin. 

Milton— First  National  Bank;  G.  C.  Chapin, 
cashier,  in  place  of  J.  M.  Caldwell. 

North  East — National  Bank;  O.  C.  Hirtzel, 
Vice-Pres. 

Philadelphia— Rittenhousc  Trust  Co.;  W.  C. 
Fitzgerald,-  Treas.,  In  place  of  Robt.  B. 
MacMullin,  resigned;  Union  National  Bank 
and  Consolidation  National  Bank,  merged 
under  former  title;  Lou.s  N.  Spielberger, 
Cashier;  F.  N.  Hansell,  Asst.  Cashier. 
Reading— Keystone  National  Bank;  Jos.  N. 

Wanner.  Acting  Cashier. 

Swiss  vale — First  National  Bank;  David  C. 
Addie,  Acting  Cashier,  in  place  of  R.  W. 
Drum,  deceased. 

Tionesta— Citizens  National  Bank;  no  Asst. 
Cashier  in  place  of  J.  C.  Bowman. 


Washington — First  National  Bank;  W.  C. 
McBride,  rres.,  in  place  of  S.  M.  Temple- 
ton; Robt.  L.  McCarrell,  Vice-Pres.,  in 
place  of  D.  M.  Donehoo;  no  Vice-Pres.,  in 
place  of  J.  W.  Seaman;  J.  C.  Baird,  Cash- 
ier, in  place  of  C.  S.  Ritchie. 

RHODE  ISLAND. 

East  Greenwich — Union  Trust  Co.  (Branch 
of  Providence) ; Howard  V.  Allen,  Mgr.,  in 
place  of  S.  M.  Knowles,  retired;  Geo.  R. 
Hanaford,  Asst.  Mgr. 

Newport — Newport  National  Bank;  Albert  K. 
Sherman,  Vice-Pres. 


SOUTH  CAROLINA. 

Florence — Commercial  Savings  Bank;  E.  H. 
Lucas.  Jr.,  Asst.  Cashier;  Farmers  & Me- 
chanics Bank.  E.  H.  Lucas,  Jr.,  Cashier, 
resigned. 

SOUTH  DAKOTA. 

Brookings— First  National  Bank;  Horace 
Flshback.  Pres.,  in  place  of  T.  L.  Fish- 
back;  H.  F.  Haroldson,  Cashier,  in  place 
of  Horace  Flshback:  E.  H.  Carlisle,  Asst. 
Cashier,  in  place  of  H.  F.  Haroldson. 

Florence — State  Bank;  S.  P.  Williamson, 
Pres.;  J.  A.  Carlson.  Cashier. 

Frederick — First  National  Bank;  C.  B.  Ains- 
worth, Cashier,  in  place  of  D.  T.  Lane. 

Madison— Lake  County  Bank;  Martin  F. 
Berther,  Cashier.  , 

Vienna— First  National  Bank;  no  Asst.  Cash- 
ier, in  place  of  Oscar  Fryslie. 


TENNESSEE. 

Dandridge— Jefferson  County  Bank;  J.  P. 
Hill  Pres.;  J.  B.  Franklin,  Vice-Pres.;  Leo 
L.  Bowden.  Cashier;  A.  M.  Felknor,  Asst. 
Cashier. 

TEXAS. 

Coleman— Coleman  National  Bank;  no  Cash- 
ier, in  place  of  Q.  V.  Henderson,  deceased, 
C.  F.  Dumas,  Asst.  Cashier. 

Del  Rio— Del  Rio  National  Bank;  no  Vice- 


UNION  TRUST  COMPANY 

PROVIDENCE,  R.  I. 


Capital,  - $1,000,000 


RATHBONE  GARDNER President 

ARCHIBALD  G.  LOOMIS... Vice-President 

JAMES  M.  8COTT Vice-President 

WALTER  G.  BROWN Treas.  & Sec  y 


A STRICTLY  COMMERCIAL  BANK 


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THE  BANKERS  MAGAZINE. 


El  Paso— City  National  Bank;  N.  S.  Stewart, 
Pres.,  in  place  of  Aug.  G.  Andreas;  Aug. 
G.  Andreas,  Vice-Pres.,  in  place  of  B.  P. 
Michelson;  J.  F.  Williams,  Vice-Pres.  and 
Cashier. 

Georgetown— First  National  Bank;  Sam  W. 
Brown,  Cashier,  in  place  of  O.  A.  Nelson; 
no  Asst.  Cashier,  in  place  of  Sam  W. 
Brown. 

Graham — Beckham  National  Bank;  no  Second 
Vice-Pres.,  in  place  of  M.  K.  Graham. 
Greenville — Greenville  National  Exchange 
Bank;  F.  J.  Phillips,  Pres.,  in  place  of  W. 
A.  Williams;  Jas.  Armlstead,  Vice-Pres.,  in 
place  of  F.  J.  Phillips. 

Houston— Harris  County  Savings  Bank;  E.  V. 
Long,  Vice-Pres. — Lumbermans  National 
Bank;  H.  M.  Garwood,  Vice-Pres.,  in  place 
of  W.  E.  Richards. 

Mount  Vernon — First  National  Bank;  no 
Asst.  Cashier,  in  place  of  Morris  Fleming. 
Olney — First  National  Bank;  J.  E.  Harrell, 
Vice-xres.;  B.  A.  Wall,  Asst.  Cashier. 

VIRGINIA. 

FarmvIIle — Planters  Bank;  Walter  Scott, 
Cashier,  In  place  of  W.  P.  Venable;  R.  S. 
Warren,  Asst.  Cashier. 

WASHINGTON. 

Cheney — Security  National  Bank;  W.  J.  Sut- 
ton. pres.;  Thos.  H.  Brewer,  Vice-Pres.; 
J.  E.  Whalen,  Asst.  Cashier. 

Kelso — First  National  Bank;  H.  Rostad, 
Cashier,  in  place  of  W.  V.  Kiebert. 


Odessa— First  National  Bank;  H.  E.  Christ- 
en sen,  Cashier,  in  place  of  W.  P.  Christen- 
sen; E.  E.  Glenn,  Asst  Cashier. 

Seattle— Dexter  Horton  & Co.,  Bankers, 
Capital  increased  to  $1,000,000. 

WEST  VIRGINIA. 

Ciarksburg — Home  Bank  for  Savings;  James 
T.  Drudy,  Cashier,  deceased. 

Elm  Grove — First  National  Bank;  Chas.  C. 
Woods,  Cashier,  in  place  of  S.  B.  Cham- 
bers; W.  B.  Gilmore,  Asst.  Cashier. 

Logan — Logan  National  Bank;  S.  B.  Lawson, 
Pres.,  in  place  of  Scott  Justice. 

Parkersburg— First  National  Bank;  C.  C. 
Martin.  Pres.,  in  place  of  J.  Camden; 
H.  H.  Moss,  v ice- Pres.,  in  place  of  C.  CL 
Martin. 

Pennsboro — First  National  Bank;  J.  A.  Leg- 
gett, Cashier,  in  place  of  C.  H.  Collins. 

WISCONSIN. 

Baraboo — Bank  of  Baraboo;  H.  Grotophorst, 
Pres.,  in  place  of  Geo.  Mertens;  C.  W. 
Whitman,  Vice-Pres. 

Platteville — First  National  Bank;  E.  RIege, 
Pres.,  In  place  of  T.  Jenkins,  Jr. 

WYOMING. 

Me.eteese — First  National  Bank;  W.  J.  Deeg- 
an.  Asst.  Cashier,  in  place  of  Florence 
McIntosh. 


BANKS  REPORTED  CLOSED  OR  IN  LIQUIDATION. 


ARKANSAS. 

Little  Rock— Capital  City  Savings  Bank; 
placed  in  charge  of  Receiver. 

CALIFORNIA. 

Calistoga — Bank  of  Calistoga;  reported 
closed. 

Los  Angeles — Consolidated  Bank;  closed 
June  5. 

IDAHO. 

Hailey — First  National  Bank;  Charter  ex- 
pired by  limitation  May  21. 

ILLINOIS. 

Chicago — United  States  Trust  uo.;  liquidated 
June  1. 

Ipava — Bank  of  Ipava;  closed. 

INDIANA. 

Warsaw — Kosciusko  County  Bank;  place  in 
charge  of  a Receiver,  June  28. 

IOWA. 

Washington — Citizens  National  Bank;  In  vol- 
untary liquidation  June  1. 

KENTUCKY. 

Dover — Citizens  Bank;  reported  closed,  June 

22. 

MARYLAND. 

Baltimore — Southern  Trust  Co.;  in  charge  of 
S.  G.  Horwitz.  Receiver;  Washington  Sav- 
ings Bank,  reported  closed. 

MASSACHUSETTS. 

Newton — Newton  National  Bank;  in  volun- 
tary liquidation,  May  15. 

MICHIGAN. 

Detroit — Commercial  Nat.  Bank;  in  volun- 
tary liquidation,  June  1. 


OHIO. 

Aberdeen — Aberdeen  Banking  Co.;  place  In 
charge  of  Receiver. 

Cincinnati— Third  National  Bank;  in  volun- 
tary liquidation,  June  18. 

OKLAHOMA. 

Coalgate — International  Bank;  In  charge  of 
Bank  Commissioner. 

Tulsa — City  National  Bank,  In  voluntary 
liquidation,  April  11. 

PENNSYLVANIA. 

Hazelhurst — Hazelhurst  National  Bank;  In 
voluntary  liouidation.  May  26. 

Philadelphia — Consolidation  National  Bank; 
in  voluntary  liquidation.  June  8;  Lincoln 
Savings!  & Trust  co.,  in  charge  of  S.  N. 
Hyneman,  Receiver. 

Pittsburg — Allegheny  National  Bank;  In 
charge  of  Receiver,  May  18;  Internationa. 
Savings  & Trust  Co.,  reported  closed. 

TENNESSEE. 

Coal  Creek— Bank  of  Anderson  County;  re- 
ported closed  June  20. 

WASHINGTON. 

Colton — Hilliard  & Co.;  reported  closed. 

RESUMPTION  OF  SUSPENDED 
BANKS. 

ARIZONA. 

Globe — Globe  National  Bank;  resumed  busi- 
ness May  23. 

NEW  YORK. 

Brooklyn— Brooklyn  Bank;  resumed  business 
June  23;  Home  Bank,  resumed  business 
June  5. 


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BANKERS  MAGAZINE 

ELMER  H.  YOUNGMAN.  Edtor 


SIXTY-SECOND  YEAR  AUGUST,  1 908  VOLUME  LXXVH,  NO.  2 


THE  PRESIDENTIAL  CANDIDATE. 


N°«-  that  the  two  great  political 
parties  have  made  their  nomina- 
tions and  put  forth  their  bid  for  pop- 
ular support,  it  is  possible  to  get  some 
idea  of  the  approaching  canvass.  Dec- 
larations made  in  party  platforms  are 
not  without  importance,  since  they 
foreshadow,  in  a general  way,  the  po- 
sition to  be  taken  by  the  contending 
armies.  But  they  hardly  do  more  than 
this.  The  respective  commanders,  as 
the  fight  progresses,  will  have  a great 
deal  to  say  as  to  the  details  of  the  plan 
of  campaign.  The  people,  too,  if  they 
become  really  interested  in  what  now 
promises  to  be  a somewhat  perfunctory 
contest,  may  upset  the  nice  calculations 
of  the  political  trimmers  on  either  side. 

Events  also  may  occur  before  the 
election  that  will  operate  powerfully 
in  affecting  the  result. 

Discarding  these  uncertainties,  how- 
ever, there  remain  several  factors  that 
will  have  a strong  bearing  on  the  out- 
come of  the  campaign. 

In  the  first  place,  the  Republicans 
will  have  the  most  money,  and  if  we 
are  to  accept  as  correct  a paraphrase 
of  Napoleon's  dictum  that  Providence 
favors  the  party  with  the  biggest  cam- 
paign fund,  the  Republicans  will  have 
the  advantage. 

While  there  has  been  a great  deal  of 
noisy  prosecution  of  wealthy  malefac- 
tors, the  majority  of  the  offenders  have 
retained  their  freedom,  and  the  fines 
imposed  upon  them  as  a punishment 
for  violating  the  laws  of  the  United 

l 


States  have  not  enriched  the  public 
Treasury  to  an  appreciable  extent.  It 
is  half  suspected  that  the  prosecutions 
referred  to  have  been  more  or  less 
Pickwickian  in  character,  or  at  all 
events  as  something  in  the  nature  of  a 
warning  to  the  “predatory  corpora- 
tions" that  they  must  be  good,  or  they 
will  really  get  into  serious  difficulties. 

What  better  evidence  could  there  be 
of  genuine  repentance  and  an  earnest 
desire  for  salvation  than  good  fat  con- 
tributions to  the  Republican  campaign 
fund?  These  will  be  forthcoming  at 
the  opportune  moment,  no  doubt;  and 
thus,  when  the  offenders  have  kissed 
the  hands  with  which  they  have  been 
smitten  (though  but  lightly)  an  era  of 
good  feeling  all  round  may  be  looked 
for. 

Money,  unquestionably,  has  a tre- 
mendous influence  in  carrying  a Presi- 
dential campaign  to  a successful  issue. 
Not  that  votes  are  bought  to  any  great 
extent,  but  simply  that  money  in  a 
contest  of  this  nature  gives  a weight 
in  favor  of  the  party  having  it,  just  as 
in  business  affairs. 

If  the  money  were  contributed  chief- 
ly by  the  people  who  honestly  desire 
the  success  of  their  party,  no  valid  ob- 
jection could  be  urged  against  the  le- 
gitimate use  of  money  in  carrying  elec- 
tions. And  it  is  generally  recognized 
that  most  of  the  expenditures  are  en- 
tirely legitimate.  Bands  of  music, 
speakers,  halls,  printing,  and  other  like 
ways  of  working  up  enthusiasm,  are 

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costly/  and  the  money  to  meet  these 
expenses  must  be  found.  If  the  parti- 
sans of  either  side  prefer  that  mode 
of  spending  their  cash,  they  should  be 
allowed  to  follow  their  bent. 

But  a great  deal  of  the  funds  used 
to  carry  elections  does  not  come  from 
so  pure  a source.  Powerful  financial 
interests  who  feel  grateful  for  past 
favors  and  who  entertain  a lively  ex- 
pectation of  still  greater  favors  to 
come,  do  not  begrudge  the  return  of  a 
small  portion  of  their  funds  to  those 
from  whom  they  were  derived.  It  is 
realized  that  contributions  of  this  char- 
acter will  be  productive  of  substantial 
benefits,  provided  the  party  receiving 
them  should  be  successful. 

It  is  hardly  to  be  supposed  that  the 
so-called  “malefactors  of  great  wealth” 
expect  to  purchase  “immunity  baths” 
by  making  contributions  to  the  Repub- 
lican campaign  fund.  The  most  they 
can  hope  for  is  that  the}f  will  have  less 
to  fear  from  the  Republicans  than  they 
w’ould  if  the  Democrats  should  win.  If 
Mr.  Bryan  were  to  become  President, 
he  would  feel  it  incumbent  upon  him- 
self to  push  the  Roosevelt  policy  con- 
siderably further  than  it  has  yet  been 
carried  by  President  Roosevelt.  On 
the  other  hand,  Mr.  Tafts  judicial 
temperament  and  his  common-sense  ob- 
servation of  existing  affairs  will  doubt- 
less constrain  him  to  be  more  cautious 
than  the  President  has  been  or  than  Mr. 
Bryan  would  be.  Yet  this  does  not 
mean  that  law-breakers  will  gain  any- 
thing by  the  election  of  Mr.  Taft.  On 
the  contrary,  his  sound  knowledge  of 
the  law  may  enable  him  to  check  the 
aggressions  of  the  powerful  corpora- 
tions far  more  effectually  than  Mr. 
Bryan  or  President  Roosevelt  could 
possibly  do. 

As  regards  the  qualifications  of  the 
two  candidates,  Mr.  Taft  is  immeasur- 
ably the  superior  of  his  antagonist, 
possessing  an  administrative  capacity 


probably  unsurpassed  by  any  living 
American.  If  the  campaign  were  sole- 
ly a contest  between  candidates,  with 
all  party  issues  laid  aside,  there  could 
be  no  possible  doubt  of  Mr.  Taft's 
election. 


jp  ARTY  principles,  however,  are  to 
be  fought  over  rather  than  the 
personalities  of  the  nominees.  If  the 
Democrats  are  shrewd,  they  will  stick 
to  what  the  platform  declares  to  be  the 
overshadowing  issue  which  manifests 
itself  in  all  the  questions  now  under 
discussion — shall  the  people  rule? 

The  Republican  party,  with  the  ex- 
ception of  M*.  Cleveland's  two  terms, 
will  have  held  unbroken  power  for 
forty  eight  years  on  March  1 next 
when  President  Roosevelt's  term  ex- 
pires. Counting  out  the  eight  years 
covered  by  Mr.  Cleveland's  Adminis- 
tration, the  Republican  reign  has  ex- 
tended over  a period  of  forty  years. 
The  party,  especially  in  its  earlier  his- 
tory, has  had  many  worthy  achieve- 
ments to  be  set  down  to  its  credit,  chief 
among  which  are  the  destruction  of 
slavery,  the  restoration  of  the  Union, 
and  the  return  to  specie  payments.  The 
tariff  policy,  whatever  abuses  may 
have  developed  in  later  years,  has  un- 
doubtedly contributed  largely  toward 
our  industrial  independence. 

But  a long  lease  of  power,  and  lat- 
terly the  almost  complete  lack  of  a 
sane  political  opposition,  have  devel- 
oped an  arrogant  spirit  among  the 
party  rulers  and  a contempt  for  the 
public  welfare.  To-day  the  Republi- 
can party  is  not  ruled  by  its  apparent 
leaders,  but  bv  a small  oligarchy  that 
uses  this  once  splendid  organization 
for  private  gain.  This  element  is  im- 
mensely more  potent  than  any  man  in 
the  party,  and  until  its  evil  power  is 
broken  but  little  hope  can  be  enter- 
tained of  legislation  shaped  in  the  peo- 
ple’s interest. 


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163 


In  turning  to  the  Democratic  party 
for  relief,  it  must  be  admitted  that  the 
people  are  about  in  the  predicament  of 
a man  who  is  being  robbed  and  who  ap- 
peals to  a lunatic  for  protection,  and 
whose  last  state  may  be  worse  than  the 
first. 

Had  Mr.  Taft  not  apparently 
shown  a readiness  to  conciliate  the  in- 
terests that  dominate  the  Republican 
party,  and  had  depended  upon  the  peo- 
ple’s belief  in  his  own  ability  and 
rugged  honesty,  he  might  have  rescued 
his  party  from  the  clutches  of  the  cor- 
rupt and  upscrupulous  element  that 
now  controls  it.  Even  yet  he  may  have 
the  courage  to  defy  the  corruptionists 
and  show  that  he  means  to  be  inde- 
pendent of  them.  No  one  doubts  Mr. 
Tafts  conscientiousness,  but  he  has 
displayed  surprising  political  timidity, 
to  say  the  least,  and  is  apparently  un- 
der the  impression  that  the  corrupt 
oligarchy  within  his  party  must  be 
placated.  As  the  campaign  progresses, 
he  may  sec  his  error.  If  he  does  not, 
the  issue,  “Shall  the  people  rule”  may 
become  the  dominant  one.  And  upon 
that  issue,  once  it  is  sharply  raised,  the 
verdict  of  the  voters  in  November  is 
likely  to  be  in  the  affirmative. 


PON  the  currency  question  the 
Democratic  national  platform 
adopted  at  Denver  last  month  could 
hardly  be  less  satisfactory.  Here  is 
the  declaration  regarding  this  import- 
ant issue: 

“We  believe  that  in  so  far  as  the 
needs  of  commerce  require  an  emer- 
gency currency  such  currency  should 
Ik  issued  and  controlled  by  the  Federal 
Government  and  loaned  on  adequate 
security  to  national  and  state  banks.” 
It  is  hardly  probable  that  any  one 
but  Mr.  Bryan  himself  could  have 
been  trusted  to  prepare  the  financial 
plank  of  the  platform.  The  above 


quotation  is  worthy  of  the  advocate  of 
free  silver  coinage  at  the  16  to  1 ratio. 
We  need  hardly  state  that  whoever  its 
author  was,  he  could  not  have  had  the 
most  elementary  conception  of  a bank- 
note currency. 

The  most  we  can  say  of  the  Demo- 
cratic position  upon  the  currency  is 
that  it  equals  the  Aldrich- Vrecland  law 
in  unsoundness. 


^^WING  to  the  experiences  arising 
out  of  the  late  panic,  the  meet- 
ing of  the  Clearing-House  Section  of 
the  American  Bankers'  Association,  to 
be  held  in  Denver,  Colo.,  September 
29,  excites  unusual  interest.  This  meet- 
ing will  offer  an  opportunity  for  the 
clearing-house  officials  of  the  United 
States  to  exchange  information  and 
views,  and  possibly  to  devise  some 
method  of  co-operation  in  times  of 
financial  stress. 

Even  if  nothing  more  should  be  done 
than  to  formulate  some  definite  plan  of 
action,  to  be  ready  when  needed,  this 
would  mark  an  important  step  forward. 
Last  fall,  when  the  financial  panic  was 
raging,  a delegation  of  bankers  came 
to  New  York  for  the  purpose  of  find- 
ing out  how  to  go  about  the  issuing  of 
clearing-house  certificates.  Such  knowl- 
edge ought  to  be  possessed  by  every 
clearing-house  in  the  country,  ready 
for  immediate  utilization  in  time  of 
need. 

Perhaps  so  long  as  Congress  refuses 
to  pass  any  sensible  currency  legisla- 
tion, the  clearing-house  certificate  will 
have  to  be  employed  to  mitigate  the 
severity  of  panics;  and  if  so,  it  would 
be  well  for  the  clearing-houses,  acting 
unitedly,  to  devise  the  best  possible 
method  for  perfecting  the  certificates. 
Anything  like  uniformity  can  hardly 
be  expected,  since  the  conditions  to  be 
met  are  dissimilar.  But  regulations 
could  be  formulated  which  would  con- 


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duce  to  safety  of  issue,  prompt  retire- 
ment and  enhanced  public  confidence  in 
the  clearing-house  certificate. 

Congress,  in  providing  by  legal  en- 
actment for  the  formation  of  national 
currency  associations,  has  adopted  a 
principle  that  might  well  be  followed 
by  the  banks  that  are  members  of 
clearing-house  associations.  While 
there  has  been  a disposition  to  confine 
clearing-house  functions  to  the  making 
of  exchanges  and  settlements  between 
banks,  it  may  become  necessary  before 
long  to  widen  the  scope  of  these  or- 
ganizations. Already  in  several  of  the 
cities  bank  examination  has  been  un- 
dertaken by  the  clearing-houses,  and 
new  functions  may  be  added  from  time 
to  time.  The  better  utilization  of  bank 
reserves  during  a season  of  panic,  the 
payment  of  interest  on  deposits,  and 
other  matters,  could  be  regulated  by 
united  action  of  the  principal  clearing- 
house association  of  the  country  much 
more  effectually  than  is  now  possible 
through  the  independent  go-as-you- 
please  policy  of  individual  banks. 

With  respect  to  the  issue  of  bank- 
note currency,  either  for  emergency 
purposes  or  otherwise,  probably  the 
existing  clearing-house  machinery 
might  have  been  found  much  more 
efficient  than  the  national  currency  as- 
sociations devised  by  Congress. 

The  increase  of  the  number  of  na- 
tional banks  and  the  possibility  that 
most  of  the  State  banks  may  at  some 
future  time  find  it  advantageous  to  en- 
ter the  national  system,  will  perhaps 
make  it  necessary  to  permit  the  issue 
of  bank  notes  only  through  some  cen- 
tral authority.  This  necessity  may 
arise  on  economical  grounds  alone.  It 
is  certainly  expensive  to  issue  bank 
notes  through  (>,000  organizations,  and 
the  expense  and  labor  will  be  multi- 
plied when  the  number  of  issuing  banks 
grows  to  10.000  and  possibly  to  20,000. 
This  fact  of  itself  will  finally  become 


one  of  the  strongest  arguments  in  fa- 
vor of  a central  bank  of  issue.  Those 
who  oppose  such  an  institution  must 
recognize  this  truth  and  they  must 
also  have  at  hand  a substitute  for  a 
central  bank  that  will  prove  equal  to 
such  an  institution  in  efficiency  and 
that  will  not  be  open  to  objection  on 
the  score  of  monopoly  or  of  control  by 
a financial  clique. 

The  clearing-houses  have  an  oppor- 
tunity of  rendering  a great  service  to 
the  business  interests  of  the  country, 
and  it  is  to  be  hoped  that  the  meeting 
of  the  Clearing-House  Section  of  the 
American  Bankers'  Association  in  Den- 
ver will  take  some  definite  action  along 
practicable  lines  that  will  tend  to  in- 
sure greater  efficiency  on  the  part  of 
our  banking  institutions. 


D ESPITE  the  mid-summer  dullness 
in  the  speculative  markets,  signs 
of  a revival  of  business  continue  to 
multiply.  One  of  the  most  encourag- 
ing indications  is  the  renewed  demand 
for  labor.  This  will  shortly  give  rise 
to  an  increased  demand  for  commodi- 
ties and  will  bring  prosperity  to  manu- 
facturers and  merchants.  In  the  build- 
ing trades  there  is  a disposition  to  take 
advantage  of  the  reduced  cost  of  ma- 
terials and  labor,  and  a considerable 
increase  in  building  activity  is  already 
to  be  noted. 

The  Presidential  campaign  may  dis- 
tract attention  from  business  to  some 
extent,  but  there  is  no  valid  reason  why 
it  should  seriously  frighten  anybody. 
If  Bryan  should  be  elected,  he  can  not 
do  much  harm  by  his  radical  policies. 
The  political  complexion  of  the  United 
States  Senate  will  remain  unchanged 
for  the  four  years  of  the  next  Admin- 
istration, and  this  will  constitute  a bar 
to  any  radical  legislation. 

Furthermore,  Mr.  Bryan  as  Presi- 
dent would  probably  be  a great  deal 


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165 


more  conservative  than  Mr.  Bryan  the 
candidate.  Very  few  sensible  men  fail 
in  being  sobered  by  the  rcsponsibilit}” 
of  great  power. 

With  good  crops  this  fall,  the  coun- 
try ought  to  experience  a gradual  and 
healthy  revival  of  business  irrespective 
of  the  outcome  of  the  election. 


N his  address  before  the  recent  con- 
vention of  the  New  York  State 
Bankers'  Association  Mr.  Alexander 
Gilbert,  president  of  the  New  York 
Clearing-House  Association,  declared 
that  panics  are  caused  by  excesses — 
too  much  speculation,  over-expanded 
credits,  excessive  issues  of  stocks  and 
bonds,  and  inflation  of  bank  liabilities 
— all  leading  to  a disregard  of  sound 
and  careful  business  methods. 

Mr.  Gilbert  stated  that  under  a 
proper  banking  system  the  currency 
requirements  of  the  country  would  be 
provided  for,  but  he  also  pointed  out 
that  this  would  not  relieve  the  abnor- 
mal demand  for  bank  credit  resulting 
from  over-trading  and  over-specula- 
tion. To  cope  with  such  a demand  the 
banks  did  not  need  authority  to  issue 
more  currency.  What  they  required 
was  either  the  power  to  create  more 
credit,  or  to  take  the  opposite  course — 
that  is,  to  control,  hold  in  check  and 
gradually  reduce  the  excessive  trading 
and  speculation.  An  increased  supply 
of  banking  credit,  Mr.  Gilbert  de- 
clared, would  have  increased  the  specu- 
lative fever  unless  it  could  have  been 
combined  with  the  application  of  a 
brake  that  would  gradually  have  re- 
duced the  speculative  pulse  to  normal. 

Is  not  this  check  to  lie  found  in  the 
rise  of  the  interest  rate?  So  long  as 
credit  may  be  had,  at  a price,  panic  can 
he  averted,  and  if  the  price  rises  suffi- 
ciently, a slowing  down  of  trading  will 
result. 

Have  not  our  currency  system,  the 


method  of  redepositing  reserves,  and 
the  intervention  of  the  Treasury  in  the 
money  market  all  operated  to  reduce 
the  natural  and  healthful  check  on  busi- 
ness activity  that  would  follow  a rise 
in  the  rate  of  interest? 


j^OUND  money  is  always  an  issue, 
declares  the  “New  York  Sim.” 
We  should  think  it  ought  to  be  a very 
live  issue  in  the  coming  campaign, 
since  the  Republican  party  has  enacted 
a law  authorizing  the  debasement  of 
our  currency  by  proposing  to  inject 
into  it  $500,000,000  of  paper,  not 
backed  by  an  adequate  gold  reserve. 

But  we  imagine  that  Mr.  Taft  will 
not  welcome  that  issue;  for,  if  reports 
be  true,  he  himself  was  one  of  the  most 
ardent  champions  of  this  unwise  and 
dangerous  measure. 


KG  I SLAT  I YTE  inte  rference  with 
the  processes  of  the  courts  may 
have  to  encounter  an  obstacle  to  which 
some  of  the  advocates  of  that  policy 
do  not  appear  to  have  given  much 
thought — that  is  the  opposition  of  the 
courts  themselves.  It  is  not  always 
easy  to  enact  a law  which  a court  may 
not  overturn,  if  so  disposed,  on  one 
ground  or  another.  It  can  hardly  be 
expected  that  the  courts  will  welcome 
the  restriction  of  their  powers  that 
would  follow  the  adoption  of  the  pro- 
posed limitation  upon  the  right  to  issue 
restraining  orders. 

As  the  executive  department  of  a 
government  must  retain  a large  degree 
of  freedom  from  cither  legislative  or 
judicial  encroachments  if  its  decrees 
are  to  have  any  force,  so  must  the 
courts,  if  their  authority  is  to  be  re- 
spected, be  exempt  from  any  curtail- 
ment of  their  powers  that  would  bring 
them  into  popular  contempt. 

There  is,  of  course,  a remedy  for 


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any  abuse  of  judicial  power,  and  that 
is  by  constitutional  amendment,  pro- 
vided legislation  should  prove  in- 
effective. 

Both  the  Republican  and  Demo- 
cratic platforms  in  bidding  for  the 
labor  vote  have  made  assaults  upon  the 
integrity  of  the  courts,  but  before 
either  programme  can  be  carried  out, 
the  courts  themselves  may  have  some- 
thing to  say. 


I.UMSY  methods  of  bookkeeping 
are  to  some  extent  responsible 
for  the  bad  showing  recently  made  by 
the  United  States  Treasury.  Since  the 
Government  has  embarked  in  the  busi- 
ness of  canal-building,  a new  item  ap- 
pears among  the  expenditures  in  the 
monthly  statements  of  receipts  and  dis- 
bursements. But  while  the  payments 
for  canal  construction  are  to  be  found 
included  under  the  head  of  “public 
works.”  there  is  no  corresponding  en- 
try among  the  receipts  showing  the 
cash  derived  from  the  sale  of  bonds  to 
provide  funds  for  constructing  the 
canal. 

As  Mr.  Ciiahles  A.  Con  ant  says  in 
a recent  issue  of  the  New  York  “Even- 
ing Post”:  “Either  the  object  for 

which  bonds  are  issued  should  not  be 
included  in  ordinary  expenditures  or 
the  money  received  for  the  bonds 
should  be  included  in  the  receipts.” 

The  Treasury  statement  in  its  pres- 
ent form  is  accurate  so  far  as  relates 
to  the  ordinary  receipts  and  expendi- 
tures, but  in  failing  to  include  receipts 
from  the  sale  of  bonds  while  carrying 
the  disbursements  made  for  the  specific 
purposes  for  which  bonds  were  sold, 
it  is  misleading.  To  continue  this  form 
of  statement  may  give  an  erroneous 
impression  of  the  Treasury’s  condition 
among  those  not  conversant  with  the 
facts,  and  may  lead  to  unnecessary 
solicitude  as  to  the  country’s  financial 


status.  The  defective  methods  of 
bookkeeping  ought  to  be  corrected  be- 
fore they  are  productive  of  annoying 
consequences. 


p RANGE,  with  its  enormous  invest- 
ment-seeking funds,  is  said  to  be 
practically  indifferent  to  American  se- 
curities. This  can  hardly  be  ascribed 
to  a well-founded  distrust  of  our  best 
stocks  and  bonds  nor  to  objections  to 
them  on  the  score  that  they  yield  an 
insufficient  return  on  the  amount  in- 
vested. The  real  cause  of  indifference 
to  our  securities  on  the  part  of  French 
investors  is  simply  that  they  do  not  un- 
derstand them.  And  American  bank- 
ers have  not  thought  it  worth  while  to 
enlighten  them. 

In  neglecting  to  cultivate  one  of  the 
best  security  markets  of  the  world,  the 
Americans  are  not  showing  their  usual 
shrewdness.  If  a steady  market  for 
our  securities  could  be  established  in 
Paris,  the  strain  on  London  and  New 
York  would  be  eased  by  distributing 
the  holdings  over  a larger  area.  We 
should  no  doubt  also  find  a readier 
market  and  obtain  loans  at  more  fa- 
vorable rates. 

To  accomplish  anything  worth  while 
will  require  time  and  patience  and 
above  all  a thorough  understanding  of 
how  the  work  is  to  lx*  done.  Yet  the 
problem  does  not  appear  insoluble. 
The  benefits  that  might  flow  from  a 
better  knowledge  regarding  American 
securities  on  the  part  of  the  investing 
classes  of  France  could  not  fail  of  ad- 
vantage to  both  sides. 


J^ECURITIES  are  being  manufac- 
tured in  undiminished  volume,  not- 
withstanding the  temporary  setback 
caused  by  last  fall’s  panic.  According 
to  the  New  York  “Journal  of  Com- 
merce” the  output  of  new  securities  in 


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COMMENT. 


167 


the  first  half  of  1908  amounted  to 
#843,379.876,  being  an  increase  of 
£43,758,776  over  the  corresponding 
period  last  year,  and  establishing  a 
new  high  record. 

It  would  seem  to  be  a reasonable  in- 
ference that  the  slowing  down  of  enter- 
prise would  reduce  the  output  of  new 
securities,  but  this  influence  has  been 
counteracted  to  a considerable  extent 
by  other  factors.  In  the  first  place, 
the  railroads  had  experienced  difficulty 


in  borrowing  on  satisfactory  terms  for 
some  time  prior  to  the  panic,  and  in 
the  second  place  the  depression  itself 
has  resulted  in  an  accumulation  of 
funds  which  the  railroads  are  now  able 
to  borrow  at  better  rates  than  were  of- 
fered before  the  October  crisis. 

While  the  actual  issue  of  securities 
has  been  large,  the  total  amount  au- 
thorized in  the  first  six  months  of  1908 
— $1,319,338,922 — is  still  greater,  and 
also  establishes  a new  high  record. 


FINANCIAL  AFFAIRS  IN  1893  AND  1896. 


I7X-PRESIDEXT  CLEVELAND’S 
recent  death  recalls  the  notable 
financial  events  of  his  second  Adminis- 
tration. The  following  account  of 
them  is  from  the  New  York  “Evening 
Post”: 

The  financial  depression  continued  through 
the  year  1893,  Secretary  Carlisle’s  several 
plans  for  relief  failed;  the  gold  reserve 
fell  to  $70,000,000  in  January,  1894,  and 
President  Cleveland  finally  determined  to 
use  his  authority  under  the  resumption  acts 
and  resort  to  bond  issues.  The  first  issue 
of  $50,000,000  five  per  cents,  netted  $58,000,- 
000,  and  the  reserve  was  raised  to  $107,000,- 
000.  The  relief  was  only  temporary,  and 
in  November,  1894,  the  reserve  had  fallen  to 
$61,000,000,  and  exportation  and  “hoarding” 
were  decreasing  it  daily.  In  that  month  a 
second  bond  issue  of  the  same  amount  and 
class  as  the  first  was  put  forth.  In  Feb- 
ruary, 1895,  the  reserve  fell  to  $41,000,000, 
and  President  Cleveland  conferred  with 
Messrs.  August  Belmont  and  J.  Pierpont 
Morgan,  representing  a New'  York  and  Lon- 
don syndicate,  and  arranged  for  the  sale  of 
$62,000,000  four  per  cent.,  thirty-year  bonds, 
redeemable  in  coin.  The  purchase  price  was 
$65,000,000. 

This  bond  sale  aroused  a storm  of  criti- 
cism. It  was  darkly  hinted  that  certain  in- 
terests known  to  be  friendly  to  the  Ad- 
ministration had  profited  largely  by  the 
transaction,  and  more  specifically  that  the 
President  and  Secretary  Carlisle  had  sac- 
rifled  the  nation’s  credit  for  the  sake  of 
temporary  relief  by  selling  at  104  1-2  when 
the  market  price  for  existing  United  States 
four  per  cents.  w*as  111.  In  partial  answ'er 
to  this  criticism,  it  wras  pointed  out  that 
while  the  bond  issues  of  1894  had  actually 
had  the  effect  of  drawing  gold  out  of  the 


country  the  contract  with  the  syndicate  con- 
tained an  important  provision  wfhieh  guarded 
against  such  a result,  and  w'hieh  had  been 
included  in  no  previous  contracts.  This 
provision  was  as  follows:  “At  least  one- 

half  of  all  coin  deliverable  hereunder  shall 
be  obtained  in  and  shipped  from  Europe,” 
and  “the  parties  of  the  second  part  and 
their  associates  hereunder  ...  as  far 
as  lies  in  their  power,  will  exert  all  finan- 
cial influences  and  will  make  all  legitimate 
efforts  to  protect  the  Treasury  of  the 
United  States  against  the  withdrawal  of 
gold  pending  the  complete  performance  of 
this  contract.”  Under  this  arrangement  the 
gold  reserve  reached  $107,000,000  in  July, 
but  although  over-speculation  and  the  in- 
ability of  the  syndicate  to  keep  the  situation 
in  control  resulted  in  a reaction  w'hich  led 
to  another  serious  slump  in  the  reserve, 
there  had  taken  place  a real  recovery  in 
trade  and  industry  during  the  interval  of 
reassurance  that  placed  the  financial  foot- 
ing of  the  country  on  a much  firmer  basis. 

In  his  last  annual  message  (December, 
1895),  the  President  recommended  a scheme 
of  general  banking  and  currency  reform* 
wfhich  included  the  retirement  and  cancella- 
tion of  greenbacks  and  Treasury  coin  notes  in 
exchange  for  low  rate  United  States  bonds. 
Congress,  however,  paid  no  attention  to  his 
recommendation,  and  the  reserve  having 
sunk  again  (January,  1896).  to  about  $60,- 
000,000,  it  was  necessary  to  resort  once 
more  to  a sale  of  bonds.  This  time  a more 
popular  plan  than  that  of  the  syndicate 
sale  wras  adopted,  and  bids  were  invited 
for  an  issue  of  $100,000,000  four  per  cent., 
thirty-year  bonds  in  denominations  of  $50. 
The  sale  was  widely  advertised,  an  appeal 
to  the  patriotism  of  the  investor  was  made, 
with  the  result  that  the  bids  received  reached 
a total  of  $527,970,000. 


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THE  BANKER  IN  LITERATURE 


A Paper  Read  Before  The  Bankers*  Club  of  Des  Moines,  Iowa,  by 
Johnson  Brigham,  State  Librarian  of  Iowa. 


TX  a recent  work  including  many  able 
addresses  on  themes  relative  to 
Banking  and  Problems  in  Banking  and 
Currency,  the  editor,  Mr.  Henry  Wal- 
ter Hull,  in  his  preface  well  says: 

That  the  bankers*  associations  of  this 
country  have  accomplished  much  that  is 
praiseworthy  from  an  educational  viewpoint 
remains  unquestioned. 

After  two  years*  fraternal,  or  at 
least  cousinly,  association  with  you  in 
these  monthly  meetings,  I am  free  to 
say — free  because  only  a director  and 
not  a practical  banker — that  the  Bank- 
ers* Club  of  Des  Moines  is  an  educator 
of  rare  value,  especially  to  us  laymen. 
Jf  I could  reach  all  the  directors  whose 
banks  are  represented  here,  I would 
urge  them  to  attend  these  meetings  and 
learn  at  first-hand  what  is  going  on  in 
the  minds  of  the  men  who  have  it  in 
their  power  to  make  or  mar  their  for- 
tunes. Recalling  the  able  papers  and 
pointed  discussions  to  which  I have 
listened  at  your  meetings,  I am  pre- 
pared to  say  of  you,  as  Congreve  said 
of  a brilliant  woman,  that  to  know  you 
(in  this  semi-convivial  way)  is  “a 
liberal  education.** 

I agree  with  Charles  Francis  Phil- 
lips in  his  introduction  to  the  work 
above  named,  that  the  bankers’  “habits 
of  prompt  determination,  precise  ac- 
tion, and  watchful  and  energetic  man- 
agement, enable  them  to  write  with 
clearness  and  a conciseness  which  make 
it  easy  to  grasp  the  ideas  they  enun- 
ciate and  to  understand  and  apply  the 
lessons  they  desire  to  teach.” 

Further  on,  speaking  of  Finance. 
Mr.  Phillips  says:  “Nothing  is  more 
closely  associated  with  the  whole  range 
of  contemporary  development,  and 
nothing  is  more  easily  complicated  by 
general  conditions.” 

This  close  association  with  eontem- 
16S 


porary  development  and  the  ease  with 
which  Finance  is  complicated  by  gen- 
eral conditions  will  be  attested  by  every 
banker  at  these  tables  who  recalls — 
and  who  can  ever  forget! — a certain 
blue  Monday  of  last  October,  when 
all  the  wheels  of  trade  seemed  sudden- 
ly off  their  whirl! 

Continuing  the  subject,  Mr.  Phil- 
lips takes  this  broad  view: 

Whether  for  good  or  for  evil,  it  [Finance] 
affects,  and  is  affected  by,  the  morals,  laws, 
habits,  ambitions,  tastes,  traditions  and 
wants  of  the  people  whose  transactions  it 
adjusts  and  whose  relations  it  so  largely 
attempts  to  shape  and  to  administer.  It 
must,  therefore,  not  be  studied  from  a pure- 
ly formal  and  arithmetical  point  of  view, 
but  from  that  of  the  complete  activities, 
needs,  prospects,  character,  and  connections 
of  the  community  whose  interests  it  serves. 

Speaking  of  the  banker  himself,  he 
says : 

It  is  not  alone  with  money  and  credit, 
with  the  clearings  of  the  world’s  commerce 
and  the  support  and  extension  of  the  world’s 
utilitarian  energies  that  he  is  concerned; 
he  has  to  do  with  matters  far  more  essential, 
which  touch  the  most  serious  interests  of 
individuals  and  operations,  making  for  peace 
or  war,  for  prosperity  or  misery,  for  prog- 
ress or  retrogression.  He  has  a vocation 
among  the  most  important  of  those  assigned 
to  men  of  action,  and  by  his  fidelity  to 
which  both  humanity  and  Providence  will 
very  strictly  judge  him,  as  well  in  respect 
to  what  he  accomplishes  as  in  respect  to 
what  he  fails  to  undertake. 

It  is  evident  that  the  banker’s  call- 
ing is  one  too  large  for  the  man 
who  looks  out  upon  the  commercial 
world  as  a lion — or  as  a jackal — from 
his  cage.  It  becomes  more  evident  with 
every  crisis,  as  in  every  season  ot  con- 
tinued prosperity,  that  the  banker  must 
be  a man  of  large  view,  of  constructive 
ability,  of  imagination  and  sympathy 
large  enough  to  put  himself  not  only 
in  place  of  the  man  in  front  of  the 


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THE  BANKER  IN  LITERATURE. 


169 


cage,  but  also  in  place  of  the  entire 
community,  the  individual  members  of 
which,  in  one  frame  of  mind  or  another, 
in  one  condition  of  finances  or  another, 
he  can  see  standing  in  line,  each  wait- 
ing for  him  to  pass  upon  his  individual 
case.  At  times  he  must  be  even  broader 
than  that:  he  must  resolve  himself  into 
the  community  in  which  his  lot  is  cast 
and  materially  help  to  solve  the  com- 
munity's problems.  He  must  be  broad 
enough  to  scorn  the  criminally  narrow 
view  of  Cain — whose  lame  excuse  was 
voiced  in  the  unforgettable  words:  “Am 
I my  brother’s  keeper?”  He  must  see, 
as  you  were  quick  to  see,  a few  months 
ago,  that  it  is  of  vital  importance  that 
employers  of  labor  are  supplied  with 
currency ; that  profitable  enterprises 
are  not  stranded  by  temporary  flurries; 
that  city  and  state  and  national  inter- 
ests are  not  jeopardized  by  conditions 
unanticipated  by  the  lawmakers.  He 
must  be  large  enough  to  see  the  far- 
reaching  financial  significance  of  the 
proverb  of  that  first  great  promoter, 
Solomon:  “There  is  that  scattereth. 

and  yet  increases;  and  there  is  that 
withholdeth  more  than  is  meet,  but  it 
tendeth  to  poverty.” 

Again,  in  the  same  connection:  “He 

that  watereth  shall  be  watered  also 
himself.  [Solomon  was  presumably 
innocent  of  all  knowledge  of  modern 
processes  of  watering  stocks.]  He  that 
withholdeth  corn  [he  might  have  in- 
cluded currency  on  good  collateral] 
the  people  shall  curse  him;  but  bless- 
ing shall  be  upon  the  head  of  him  that 
selleth  it.  He  that  trusteth  in  his 
riches  shall  fall;  but  the  righteous  shall 
flourish  as  a branch.” 

But  I fear  I lay  myself  open  to  the 
charge  of  obtaining  a hearing  under 
false  pretences.  Be  assured  the  lec- 
ture is  over:  I will  now  proceed  to  my 
theme. 

SOME  BANKERS  IN  HISTORY. 

I. 

• 

If  we  would  go  back  to  the  begin- 
nings of  the  literature  of  banking,  we 
must  go  back  to  the  Chinese,  with  whom 
so  many  good  things  originated. 


The  first  known  work  on  finance  is 
“The  Examination  of  Currency,”  by 
the  Chinese  banker,  Ma-twan-lin,  pub- 
lished in  1321.  In  the  highly  poetical 
language  of  the  Flowery  Kingdom, 
bank  notes  were  by  him  called  “flying 
money.”  Some  of  us  still  find  the 
term  singularly  appropriate! 

Marco  Polo,  in  the  thirteenth  cen- 
tury, and  Sir  John  Mandeville,  in  the 
fourteenth,  pioneers  in  the  literature  of 
travel,  tell  of  the  fiat  money  banker, 
Kublai  Khan,  showing  that  the  auto- 
crat of  the  East  anticipated  our  mod- 
ern fiatists  by  nearly  seven  centuries. 
Polo  quaintly  adds  to  his  description: 
“Now  you  have  heard  the  ways  and 
means  whereby  the  great  Khan  may 
have,  and,  in  fact,  has,  more  treasure 
than  all  the  kings  in  the  world.” 

Naturally  enough,  this  fiat  system 
of  financing  an  empire  and  its  emperor 
led  to  abuses.  Mandeville,  who  fol- 
lowed Polo  to  Tartary,  says: 

The  Emperour  may  dispenden  als  moche 
as  he  wile  w'ithouten  estymacioun.  For 
he  dispendeth  not,  he  maketh  no  money,  but 
the  lether  emprented,  or  of  papyre.  . .For 
there  and  beyonde  hem  thei  make  no  money, 
nouther  of  gold  nor  of  sylver.  And  there- 
fore he  may  despende  ynow  and  outrage- 
ously. 

But  the  archeologists  go  many  cen- 
turies back  of  Kublai  Khan.  We  find 
the  earliest  banking  house  in  history 
to  be  that  of  Egibi  & Company,  of 
Babylon.  The  records  of  this  house 
when  unearthed  were  found  to  be  on 
clay  tablets,  kept  in  an  earthen  jar. 
Its  commercial  paper — paper  by  cour- 
tesy— was  in  clay  and  consequently 
non-negotiable ! 

Xenophon,  the  historian,  throws  a 
sidelight  upon  early  banking  in 
Greece,  showing  that  the  Athenian 
bankers  paid  four  per  cent,  on  deposits, 
and  exacted  anywhere  from  ten  per 
cent,  per  annum  to  twenty-five  per  cent, 
per  month — the  rate  presumably  pro- 
portionate to  the  risk.  The  historian 
himself  tried  his  hand  at  finance — and 
with  the  usual  result  when  one  with 
purely  theoretical  knowledge  attempts 
the  practical.  He  proposed  the  or- 


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170 


THE  BANKERS  MAGAZINE. 


ganization  of  a gigantic  bank,  absorb- 
ing all  the  private  banks  in  Athens, 
which,  after  paying  big  dividends, 
would  enable  the  city  to  build  temples, 
chambers  of  commerce  and  wharves, 
making  Athens  for  all  time  the  com- 
mercial center  of  the  world.  The  pro- 
posed absorption  never  took  place — the 
private  bankers,  like  one  of  Dickens’s 
characters,  refusing  to  be  swallowed 
up ! 

The  thrift  and  greed  of  the  Greeks 
found  lodgment  in  Rome.  The  old 
Latin  comedies  contain  many  allu- 
sions to  wealthy  and  influential  bank- 
ers— some  of  the  allusions  respectful; 
others  mercilessly  satirical.  Cicero  and 
Justinian  in  their  turn  attempted,  and 
in  part  succeeded,  in  curbing  the 
avarice  of  Rome’s  private  bankers. 

The  letter  of  credit  was  slow  to  win 
its  way  in  Greece  and  Rome.  When 
Cicero  sent  his  son  to  Athens,  he 
wrote  to  Atticus  inquiring  whether  or 
not  it  would  be  possible  for  the  boy 
to  procure  a letter  of  credit  that  would 
be  honored  by  Athenian  bankers. 

It  is  interesting  to  note  that  the 
famous  mansion  unearthed  in  Pompeii 
was  that  of  a Pompeiian  banker,  the 
elegant  furnishings  of  which  indicate 
that  the  prehistoric  banker  conducted 
his  business  not  wholly  on  a philan- 
thropic basis ! 

The  Medici  of  Florence. 

Mv  memory  alights  upon  that  fam- 
ous body  of  bankers  and  promoters, 
the  Medici,  of  Florence,  who,  though 
only  private  citizens,  in  their  time 
were  loved  and  hated,  ardently  wooed 
and  savagely  pursued;  a family  whose 
history  is  the  history  not  alone  of 
Florence  but  of  Italy  and  much  of  con- 
tinental Europe,  whose  banking  house 
in  Florence,  with  its  sixteen  branch 
houses  in  the  principal  cities  of  the 
continent,  made  terms  with  cities  and 
nationalities,  its  final  yes  or  no  mak- 
ing and  unmaking  emperors  and  kings; 
a family  whose  loves  and  hates,  weak- 
nesses and  strength,  private  and  pub- 
lic demands  and  benefactions  were  the 
themes  of  historians,  romancers  and 


poets.  Hall  am  illustrates  the  complete 
surrender  of  Florence  to  its  bankers 
by  stating  that  at  one  time  the  Medici, 
unable  to  realize  on  some  of  their  for- 
eign loans,  saved  themselves  from 
bankruptcy  by  bankrupting  their  city. 
There  was  no  fiction  or  poetry  about 
that ! Cosimo  de  Medici  spent  much 
time  and  money  inculcating  the  philos- 
ophy of  Plato;  but  he  never  forgot  his 
collections — except  in  case  of  some 
poor  devil  of  a poet  or  philosopher 
whose  debt  he  chose  to  forget.  In  the 
matter  of  interest  this  house,  like  the 
railroads  a few  decades  ago,  'was 
wont  to  “charge  what  the  traffic  will 
stand.” 

Boccaccio,  Petrarch,  Ariosto  and 
other  Italian  poets  and  romancers,  al- 
ternately burned  incense  at  the  Me- 
dician  shrine  and  satirically  smiled  at 
the  undue  satisfaction  with  which  their 
homage  was  received. 

Lorenzo  de  Medici,  late  in  the  fif- 
teenth century,  evolved  a Florentine 
plan  which  as  a centralizer  went  one 
better  than  our  Des  Moines  plan!  He 
established  a council  in  which  absolute 
power  was  concentrated.  It  was  com- 
posed of  seventy  citizens  appointed  for 
life,  and  all  completely  under  his  in- 
fluence, so  that  from  that  time  forth  a 
banker,  in  the  role  of  benevolent  despot, 
held  undisputed  sway  over  Florence. 

Early  Banking  in  England. 

As  it  is  not  my  purpose  to  attempt 
in  these  pages  a history  of  banking,  I 
will  proceed  to  jump  from  Rome  to 
England.  Passing  over  several  cen- 
turies, I am  halted  by  a work  entitled 
“Discourse  of  Trade,”  by  Sir  Joseph 
Child,  published  in  the  seventeenth 
century,  in  which  is  coined  the  oppro- 
brious word,  “hankering,”  as  follows: 

This  gaining  scarcity  of  money  proceeds 
from  the  trade  of  hankering,  which  ob- 
structs circulation,  advances  usury,  and 
renders  it  so  easy  that  most  men,  as  soon 
as  they  can  make  up  a sum  of  from  £A0  to 
£100,  send  it  in  to  the  goldsmith,  which  doth 
and  will  occasion,  w'hile  it  lasts,  that  fatal 
pressing  necessity  for  money  visible  through- 
out the  whole  Kingdom,  both  to  prince  and 
people. 


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THE  BANKER  IN  LITERATURE. 


171 


Sir  John  Lubbock,  son  of  the  great 
scientist,  in  an  inaugural  address  as 
president  of  the  Bankers*  Institute  of 
London,  in  1879,  shows  how  slow  our 
English  bankers  are  to  discard  old 
methods  by  relating  that  not  until  1826 
did  the  old  wooden  tallies  entirely  pass 
out  of  use.  “The  tally,’*  says  Lub- 
bock, “was  a willow  stick,  about  five 
feet  long,  an  inch  in  depth  and  thick- 
ness, with  the  four  sides  roughly 
squared.**  On  one  of  the  four  sides 
the  amount  of  money  involved  was  ex- 
pressed in  notches.  On  each  of  the 
two  sides  next  to  the  notched  side,  the 
description  of  the  payment  was  writ- 
ten. The  stick  wa§  split  in  half 
through  the  notches,  one  half  con- 
stituting the  tally  was  given  to  the 
person  making  the  payment,  the  other, 
the  counter  tally,  was  kept  at  the  bank 
as  a stub! 

Lubbock  tells  us  that  bankers  used 
to  deposit  their  money  for  safe -keep- 
ing in  the  Tower  of  London;  but 
Charles  I.  broke  up  the  custom  by 
seizing  all  the  money  there,  some 
£120,000.  Later,  the  Exchequer  it- 
self was  closed  by  Charles  II.,  and  all 
the  money  in  sight,  £1,328,000,  was 
seized. 

Grammont,  the  historian,  throws  a 
curious  light  upon  the  career  of  Sir 
Robert  Vyner,  a goldsmith-banker  of 
the  time  of  Charles  II.,  who  became 
all  too  fond  of  that  prince  of  good- 
fellows.  One  time  the  king  dined  with 
his  banker  friend,  and  finding  Sir 
Robert  warming  toward  him  to  an  un- 
comfortable degree,  stole  away,  but 
Sir  Robert  pursued  him.  Catching  the 
king  by  the  hand,  he  cried  out  w ith  an 
oath,  “Sir,  you  shall  stay  and  take 
t’other  bottle.’*  The  bibulous  monarch, 
not  averse  to  the  punishment  prescribed, 
repeated  from  an  old  song  the  line — 

“He  that’s  drunk  is  as  great  as  a King” — 

then  turned  back  and  resumed  his  seat, 
manfully  emptying  t’other  bottle. 

The  banker's  reward  for  his  loyalty 
was  the  closing  of  the  Exchequer  and 
the  confiscation  of  all  Sir  Robert’s 
funds  there  on  deposit. 


Macaulay  throws  a side  light  upon 
the  period  following  the  overthrow  of 
Charles  I.  He  relates  that  the  father 
of  the  poet  Alexander  Pope  retired 
from  business  about  the  time  of  the 
Revolution,  carrying  with  him  into  the 
country  a strong-box  containing  about 
£20,000,  from  which  he  drew  out  from 
time  to  time  the  money  needed  to  de- 
fray expenses — so  far  removed  was 
that  prime  essential  of  banking — name- 
ly, confidence,  from  the  minds  of  men 
of  wealth  after  the  confiscation  of  the 
Exchequer. 

The  highest  compliment  ever  paid 
the  bankers’  profession  was  that  of 
August  Comte,  who,  in  his  “Positive 
Philosophy,**  declared  that  the  supreme 
government  of  a country  should  be  en- 
trusted to  three  bankers  who  should  re- 
spectively take  charge  of  commercial, 
manufacturing  and  agricultural  opera- 
tions ! 

Lubbock  gives  to  a minister  of  the 
Gospel  the  credit  of  originating  the 
savings  bank,  thus  accrediting  that  in- 
stitution with  the  missionary  spirit  so 
noticeable  to  this  day  in  the  conduct  of 
savings  banks! 

BANKERS  AS  CREATORS  OF 
LITERATURE. 

II. 

Samuel  Rogers — 1763-1855.  A bi- 
ographer of  Samuel  Rogers,  “the  bank- 
er poet  of  England,**  suggests  a reason 
why  there  are  so  few  poets,  among 
bankers.  He  says  that  Rogers*  great- 
est hindrance  as  a poet  was  his  con- 
tinuous prosperity!  “From  the  begin- 
ning to  the  end  of  his  life  he  was  quite 
too  comfortable  for  poetic  thrills.’*  If 
this  theory  be  correct,  then  all  you 
gentlemen  need  is  a succession  of  black 
Fridays  and  blue  Mondays  to  develop 
the  thrills  essential  to  poetic  creation! 
But  I remain  of  the  opinion  that  poets 
are  born — not  made,  and  that  while 
Rogers  was  born  with  fine  sensibilities 
and  keen  appreciation,  it  was  not  in 
him,  either  as  poet  or  banker,  to  set 
the  world  on  fire.  Rogers  wanted  to  be 
a Presbyterian  minister,  but  his  father 
made  him  a banker.  He  dutifully 


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obeyed  his  father,  though  secretly  bent 
on  taking  to  the  woods  and  becoming 
a poet.  His  literary  career  began  in 
1781  when,  in  his  nineteenth  year,  he 
became  a contributor  to  the  “Gentle- 
man's Magazine.”  At  twenty-four  he 
published  anonymously  his  first  book  of 
poems.  At  twenty-nine  he  published 
anonymously  the  poem  with  which  his 
name  is  oftenest  associated,  “The 
Pleasures  of  Memory.”  The  poem  hit 
the  mild  taste  of  the  time,  and  strange 
as  it  seems  to  us  now,  it  rapidly  passed 
through  fifteen  editions.  When  he  was 
thirty  his  father  died  and  he  became 
the  head  of  his  father’s  banking  busi- 
ness, possessed  of  large  wealth  and  an 
income  of  at  least  ,€5.000.  His  young- 
er brother  took  to  business,  relieving 
him  of  the  burden  of  banking  details, 
thus  leaving  him  comparatively  free  to 
indulge  his  taste  for  literature,  arts  and 
society.  Like  Dr.  Johnson,  he  became 
more  of  a power  as  a leader  of  men 
socially  than  as  a poet.  His  elegant 
home  and  profuse  hospitality  made 
him  a person  of  much  importance  in 
his  time.  His  record  as  a poet  rests 
upon  “The  Pleasures  of  Memory,” 
“Human  Life,”  and  “Italy,”  all  writ- 
ten in  the  same  tranquil  strain — in 

measure  suggesting  Pope,  Johnson  and 
Goldsmith,  his  patron  saints  in  litera- 
ture. In  his  old  age  he  was  regarded 
as  a Nestor  among  poets.  Everybody 
prized  his  friendship  and  feared  his 
enmity.  His  kindness  as  a patron, 
with  his  severity  toward  those  who 
asked  no  favors  of  him,  is,  perhaps, 
over-illustrated  by  a remark  of  the 
poet,  Campbell.  When  some  one  com- 
plained of  Rogers’  spiteful  tongue. 
Campbell  said:  “Borrow  five  hundred 
pounds  of  him.  and  he  will  never  say  a 
word  against  you  until  you  want  to 
repay  him.” 

Rogers’  benevolence  was  not  alone 
in  giving  money  to  the  needy;  it  ex- 
tended to  kindly  offices  of  friendship, 
and  a generous  use  of  his  influence.  In 
a letter  from  Tom  Moore  to  John  Mur- 
ray, the  publisher,  we  have  a pleasant 
picture  of  the  banker-poet  as  a man — 


always  eager  to  serve  a worthy  persoir 
or  help  a good  cause.  It  seems  that 
Murray  had  offered  Crabbe  .£3,000  for 
his  works,  and  though  the  sum  was  a 
mine  of  wealth  to  the  impecunious  poet, 
friends  acting  as  his  agents  declined 
the  offer  thinking  to  get  a better  one 
from  a rival  publisher.  In  that  they 
failed,  and  Crabbe  was  disconsolate. 
In  this  crisis  Rogers  and  Moore  went 
to  Murray  and  urged  a renewal  of  the 
generous  offer.  Murray  relented  and 
the  two  withdrew  from  the  publisher’s 
office  much  elated. 

“But,”  says  Moore,  “Rogers  insisted 
that  I should  accompany  him  to 
Crabbe’s  lodgings,  and  enjoy  the 
pleasure  of  seeing  him  relieved  from 
his  suspense.  We  found  him  sitting  in 
his  room,  alone,  and  expecting  the 
worst;  but  soon  dissipated  all  his 
fears  by  the  agreeable  intelligence 
which  we  brought.” 

When  the  poet  was  eighty-one  years 
old,  an  event  occurred  which  somewhat 
disturbed  the  old  man’s  serenity.  One 
Sunday  his  bank  was  burglarized,  and 
the  sum  of  £50,000  was  stolen  from 
the  vault.  The  man’s  temperament 
proved  equal  to  the  emergency.  His 
promptitude  prevented  the  cashing  of 
the  stolen  notes.  The  Bank  of  Eng- 
land repaid  them  under  his  guaranty 
of  indemnity,  and  after  two  years  he 
recovered  the  notes  by  the  payment  of 
£2,500.  Speaking  of  the  incident  at 
the  time,  the  old  man  said,  “I  should 
be  ashamed  of  myself  if  I were  unable 
to  bear  a shock  of  this  kind  at  my  age.” 

In  Dvce’s  Table  Talk  of  Samuel 
Rogers,  we  find  a few  glimpses  of  the 
practical  or  business  side  of  the  poet's 
nature. 

Lord  Erskine  heard  of  some  one  who 
had  died  worth  £200,000;  Rogers  ob- 
served, “Well,  that’s  a very  pretty  sum 
to  begin  the  next  world  with !” 

Here’s  a pointer  for  the  banker  of 
the  period,  whose  daily  mail  is  not 
complete  unless  it  contains  several  fine 
opportunities  to  enhance  his  popularity 
by  subscribing  to  worthy  causes.  To 
all  letters  soliciting  his  subscription. 


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17  S 


Rogers  approvingly  quoted  Erskine  as 
replying  in  this  form  of  words: 

Sir,  I feel  much  honoured  by  your  ap- 
plication to  me,  and  I beg  to  subscribe — 
here  the  reader  had  to  turn  over  the  leaf, 
only  to  find  after  the  word  “subscribe”  the 
formal  conclusion — “myself  your  obedient 
servant.” 

Matthias  in  “The  Pursuits  of  Litera- 
ture “ refers  to  Rogers  as  the  banker 
who  “dreams  on  Parnassus.”  The 
allusion  is  to  a letter  to  Mr.  Pitt,  in 
which  Rogers  said:  “Things,  Sir,  are 
not  changed.  Time  was  when  bankers 
were  as  stupid  as  their  guineas  could 
make  them;  they  were  neither  orators, 
nor  painters,  nor  poets.  But  now,”  etc. 

“When  literature  is  the  sole  business 
of  life,”  Rogers  is  quoted  as  saying, 
“it  becomes  a drudgery;  when  we  are 
able  to  resort  to  it  only  at  certain 
hours,  it  is  a charming  relaxation.” 
He  adds:  “In  my  earlier  years,  I was 
a banker’s  clerk,  obliged  to  be  at  the 
desk  every  day  from  ten  till  five 
o'clock;  and  I never  shall  forget  the 
delight  with  which,  on  returning  home, 
I used  to  read  and  write  during  the 
evening.” 

Rogers’  modesty,  revealed  by  the 
anonymous  publication  of  most  of  his 
literary  work,  is  best  seen  in  his  refusal 
of  the  poet  laureateship  in  1850,  after 
the  death  of  Wordsworth. 

David  Ricardo — 1772-1823.  David 
Ricardo,  the  greatest  English  political 
economist  since  Adam  Smith,  served  an 
apprenticeship  in  his  father’s  banking- 
house,  in  London.  When,  at  twenty- 
one,  David  renounced  the  Jewish  faith 
that  he  might  marry  the  woman  of  his 
choice,  the  elder  Ricardo  disowned  him. 
But  a true  descendant  of  the  seed  of 
Abraham  is  far  from  discouraged  by  a 
hard  throw  in  the  first  bout.  It  is  re- 
lated that  within  five  years  thereafter 
the  thrifty  David,  with  the  sympathy 
and  support  of  the  chief  members  of 
the  stock  exchange,  backed  by  his  own 
rare  coolness  of  head,  mathematical 
power,  sound  judgment,  and  rare  good 
luck,  was  enabled  to  take  advantage  of 
the  financial  disturbances  of  the  time. 


and  in  less  than  five  years  he  grew  rich. 
In  1797,  an  event  occurred  which 
turned  the  current  of  his  thought,  and 
of  the  thoughts  of  millions  as  well. 
That  event  was  the  conjunction  of  an 
original  thinker  and  practical  man  of 
affairs  with  a copy  of  Adam  Smith’s 
great  work,  “The  Wealth  of  Nations.” 
Ricardo’s  practical  application  of  the 
knowledge  thus  acquired  and  suggested, 
led  to  the  founding  of  a system  of 
political  economy  which  is  with  us  to 
this  day.  No  present-day  political 
economist  can  afford  to  ignore  Ricardo. 

George  Grote — 179^-1871.  The 
historian  of  Greece,  pre-eminent  in  a 
well-worked  field  of  literature,  is 
George  Grote,  a London  banker,  who 
during  a large  part  of  his  literary 
career  was  the  active  business  head  of 
the  banking-house  of  Grote,  Prescott 
& Co.,  Threadneedle  street,  London. 
His  business  life  began  at  the  age  of 
sixteen.  For  ten  years  thereafter,  he 
rode  horseback  to  and  from  the  bank 
and  Beckenham,  alternating  the  details 
of  his  father’s  business  with  studies  in 
German,  Political  Economy,  and  the 
classics.  His  father  had  only  con- 
tempt for  his  intellectual  pursuits,  and 
his  mother  only  severe  censure  for  the 
liberal  tendencies  of  the  boy’s  unpuri- 
tanical  mind.  Fortunately,  at  twenty, 
he  became  deeply  interested  in  a young 
woman  of  fine  mind  and  congenial 
tastes,  whom  he  succeeded  in  winning 
after  many  discouragements  and  a wait 
of  five  years.  The  best  “appreciation” 
of  the  historian’s  life  and  character 
was  written  by  her  soon  after  his 
death. 

At  the  age  of  thirty-two,  the  brunt 
of  the  banking  business  was  thrown 
upon  him ; but  detail  cares  could  not 
crush  the  scholar  and  author.  Grote 
became  an  occasional  contributor  to 
periodical  literature.  He  was  a mem- 
ber of  the  Utilitarian  Society  of  Phi- 
losophers and  was  wont  to  meet  with 
them  in  a room  donated  them  in  his 
bank  building.  In  1825  he  was  one  of 
the  founders  of  the  new  University  of 
London.  In  spite  of  the  many  other 


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claims  upon  his  time,  he  gave  the  uni- 
versity that  unremitting  attention  %o 
details  necessary  to  its  success.  His 
business  experience  and  ability  con- 
tributed largely  to  the  raising  of 
money  and  the  organization  of  the  en- 
terprise. 

Not  until  his  fiftieth  year  was  he 
free  to  enter  upon  continuous  literary 
work.  The  first  two  volumes  of  his 
History  of  Greece  appeared  in  1845. 
The  work  was  completed  in  1856,  when 
the  author  was  sixtv-two  years  old. 
Grote’s  long  and  successful  working 
career,  extending  almost  to  the  day  of 
his  death,  has  been  attributed  to  the 
thoughtful  provision  made  by  his  de- 
voted wife  for  his  rest  and  recreation 
outside  working  hours — a hint  to  bank- 
ers’ wives ! 

The  proverbial  modesty  of  bankers — 
evinced  in  the  recent  search  of  two  sub- 
committees for  representative  candidates 
for  places  on  the  new  Des  Moines 
Commission,  the  search  including  your 
honored  president,  Mr.  Blair — was 
evineed  by  the  banker-historian  Grote, 
when  in  1869  Premier  Gladstone  offered 
him  a peerage  as  a tribute  to  his  “char- 
acter, services,  and  attainments.”  The 
heart  of  the  old  radical  w*as  honored 
by  this  recognition,  but  the  honor  was 
unhesitatingly  declined. 

Sir  John  W.  Lubbock — 1803-1865. 
One  of  England’s  greatest  mathema- 
ticians and  astronomers.  Sir  John  W. 
Lubbock,  was  a banker  and  the  son  of 
a banker.  Born  in  1803,  at  the  age  of 
22,  he  became  a partner  in  the  London 
banking-house  of  Lubbock  & Company. 
Until  I860,  he  divided  time  between 
banking  and  science.  The  herculean 
tasks  undertaken  by  this  man  of  affairs 
in  mathematics  and  astronomy  would 
seem  to  have  made  it  impossible  for 
him  to  retain  his  interest  in  banking, 
or  to  give  finances  any  portion  of  his 
time.  But  such  was  not  the  case.  We 
find  him  not  only  an  active  member  of 
all  sorts  of  philosophical  and  scientific 
associations,  but  also  treasurer  of  the 
Royal  Society,  Vice-Chancellor  of  the 
London  University,  a member  of  sev- 
eral legislative  commissions — notably 


that  on  the  standards  of  weights  and 
measures. 

At  the  age  of  37,  he  succeeded  to 
the  baronetcy,  and  became  sole  work- 
ing partner  of  Lubbock  & Company. 
He  guided  the  bank  successfully 
through  the  panics  of  1847  and  1857- 
In  I860  his  house  consolidated  with 
another,  taking  the  name  Roberts, 
Lubbock  & Co.  His  partial  retirement 
from  business  then  became  total  and 
permanent.  At  the  age  of  62  his  all 
too  busy  life  came  to  a close.  He  left 
behind  him  a fame  as  a contributor 
to  the  literature  of  science  second  to 
none  of  his  time,  and  as  a banker  a 
name  which  stood  for  sterling  honesty, 
jealous  regard  for  the  honor  of  his 
house  and  enthusiastic  belief  in  the 
banker’s  mission.  His  eldest  son. 
honoring  the  name  of  his  father  and 
grandfather,  was  for  several  years 
president  of  the  Bankers*  Institute  of 
London,  from  whose  inaugural  oddress 
was  gleaned  much  of  the  historical 
data  contained  in  the  earlier  pages  of 
this  paper. 

Walter  Bagehot — 1826-1877.  One 
of  England’s  great  men  who  haven’t 
yet  come  into  the  full  measure  of  their 
well-earned  fame,  is  the  banker,  author 
and  political  economist,  Walter  Bage- 
hot. 

Bagehot  was  a cynic,  and  cynics  are 
slow  to  win  appreciation.  Leslie  Ste- 
phen says  he  always  scorned  a fool, 
and  then,  with  a quiet  humor,  adds: 
“In  early  days  his  scorn  was  not  yet 
tempered  by  the  compassion  w’hich  is 
the  growth  of  years — when  we  have 
come  to  know  how  many  and  what  ex- 
cellent people  belong  to  the  class.” 

Bagehot  was  in  Paris  in  the  revolu- 
tion of  1848.  He  superintended  the 
construction  of  the  barricades,  but  only 
to  amuse  himself.  He  wrote  he  was 
revolted  by  the  “sallow,  sincere,  sour 
fanatics  behind  them.” 

Bagehot’s  book  on  “The  British 
Constitution,”  says  Leslie  Stephen, 
“came  like  a revolution;  simply  because 
he  had  opened  his  eyes  and  looked 
at  facts”* -a  habit  of  bankers. 

This  versatile  man  of  affairs  and 


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author,  at  the  age  of  twenty-six  began 
to  take  an  active  part  in  his  father’s 
banking  business.  The  practical  ex- 
perience and  trained  habit  of  observa- 
tion and  exhaustive  analysis  obtained 
in  banking  gave  to  his  studies  of 
economic  questions  rare  practical  value. 
His  articles  on  “International  Coin- 
age/’ the  “Depreciation  of  Silver/’ 
etc.,  collected  after  his  death,  have 
permanent  value. 

The  banker’s  habit  of  taking  noth- 
ing for  granted — of  looking  into  a sit- 
uation as  though  the  investigator  were 
the  original  discoverer,  is  the  dis- 
tinguishing literary  quality  of  Bagehot. 
Other  writers  on  the  British  Constitu- 
tion had  been  theorizing  at  a distance. 
Bagehot  had  actually  seen  the  wheels 
of  government  go  round  and  had 
scientifically  studied  their  movement. 
He  was  the  first  practical  man  of 
affairs  who  had  studied  the  Constitu- 
tion as  a banker  studies  a proposition 
for  a loan. 

Bagehot’s  “Lombard  Street’’  is  a 
vivid  picture  of  the  London  banker  in 
the  concrete,  “full  of  hopes  and  fires 
and  passions’’ — as  Stephen  says.  “The 
ordinary  treatises  had  left  us  in  the 
dull  leaden  cloud  of  a London  fog. 
which,  in  Bagehot’s  treatment  dis- 
perses, to  let  us  see  distinctly  and 
vividly  the  human  beings  previously 
represented  by  vague,  colorless  phan- 
toms.” 

Bagehot,  in  his  shrewd  way,  thus 
sums  up  in  a single  sentence  the  true 
policy  of  banks  in  times  of  crisis: 
“What  is  wanted  is  to  diffuse  the  im- 
pression that  though  money  may  be 
dear,  still  money  may  be  had.” 

Fitz-Greexe  Halleck — 1790-1867. 
The  pioneer  “banker-poet”  of  America 
was  Fitz-Greene  Halleck,  born  in 
Guilford.  Connecticut,  in  1790.  When 
nearly  twenty-one  he  went  to  New  York 
to  seek  his  fortune.  About  to  embark 
for  Virginia  after  vainly  searching  for 
work,  he  met  Jacob  Barker,  a prom- 
inent New  York  banker,  and  was  em- 
ployed by  him.  In  a letter  to  his 
sister  in  1811  he  gives  us  a picture  of 


a typical  banker’s  life  at  that  early 
period.  He  writes  that  Mr.  Barker 
“seldom  comes  to  the  office  before  ten 
in  the  morning;  stays  an  hour;  goes  to 
the  coffee  house;  returns  at  two;  stays 
five  minutes;  goes  to  dinner;  returns  at 
five,  and  stays  an  hour  and  a half, 
and  then  goes  home.” 

The  sudden  departure  of  a fellow 
clerk  promoted  young  “Fitz”  from  the 
journal  to  the  ledger,  entitling  him  to 
the  name  bookkeeper,  and  giving  him 
an  authority  over  the  other  clerks;  but 
he  writes  his  sister  he  finds  it  “a  pain- 
ful pre-eminence,  as  it  requires  more 
care  and  attention  than  any  other  sta- 
tion in  the  counting-house.” 

Even  then  he  was  publishing  verses 
anonymously  in  Boston  newspapers. 
Like  Byron’s  Corsair,  the  young  man 
alternated  “from  toil  to  rest”  (reading 
and  writing  poetry),  finding  “joy  in 
every  change.”  The  New  York  “Even- 
ing Post”  in  time  began  to  publish 
his  poems  anonymously,  much  to  his 
secret  satisfaction. 

It  occurs  to  me  that  possibly  when 
a banker  “drops  into  poetry”  he  has 
something  of  the  feeling  confessed  by 
Silas  Wegg,  that  poetry  is  just  a little 
too  much  to  be  expected  of  a man  of 
affairs;  but  with  this  difference:  in- 

stead of  charging  double  for  poetry 
as  was  Wegg’s  practice  as  a reader, 
Halleck  gave  his  verse  away,  but  al- 
ways anonymously.  He  was  ever  will- 
ing, if  not  eager,  to  own  them  after 
they  had  safely  run  through  the  literary 
clearing-house. 

One  of  the  most  beautiful  friend- 
ships among  literary  men  is  that  which 
existed  between  Halleck  and  James 
Rodman  Drake,  a friendship  made 
memorable  by  Halleck’s  beautiful  me- 
morial verse: 

Green  be  the  turf  above  thee, 

Friend  of  my  better  days! 

None  knew  thee  but  to  love  thee, 

Nor  named  thee  but  to  praise. 

Many  an  ex-school  boy  who  in  his 
time  has  recited  Drake’s  “American 
Flag,”  will  recall  the  best  lines  in  the 
poem  which  read: 


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THE  BANKERS  MAGAZINE. 


Forever  float  that  standard  sheet! 

Where  breathes  the  foe  that  falls  before 
us, 

With  Freedom’s  soil  beneath  our  feet, 

And  Freedom’s  banner  streaming  o’er  us  I 

It  is  interesting  to  note  that  Drake, 
not  at  all  pleased  with  his  own  con- 
cluding lines,  said,  "Fitz,  can’t  you 
suggest  a better  stanza?’'  Whereupon 
Halleck,  on  the  spur  of  the  moment, 
sat  down  and  wrote  the  stirring  lines 
just  quoted. 

The  Greek  simplicity  and  purity  of 
the  poet’s  early  verse  is  perhaps  best 
seen  in  "Alnwick  Castle,”  that  product 
of  his  tour  abroad  in  1822.  Here  is  a 
sample  stanza: 

Wild  roses  by  the  Abbey  towers 

Are  gay  in  their  young  bud  and  bloom — 
They  were  born  of  a race  of  funeral-flowers 
That  garlanded,  in  long-gone  hours, 

A Templar’s  knightly  tomb! 

Poe,  a merciless  critic,  pronounced 
this  stanza  "gloriously  imaginative,” 
and  confessed  himself  "at  loss  to  dis- 
cover its  parallel  in  American  poetry.” 
I find  in  Halleck’s  biography  a 
slender  link  connecting  the  venerable 
banker-poet  of  England  with  the  young 
banker-poet  of  America. 

In  a letter  to  Halleck  from  his 
friend  Cogswell,  in  which  is  related  a 
conversation  had  in  1849  with  Rogers, 
at  one  of  his  famous  breakfasts,  his 
host  asked  Lady  Davy  if  she  had  read 
Halleck’s  poems,  and  when  she  an- 
swered no,  responded,  “Shame  on  you! 
He  has  written  some  things  which  no 
poet  living  has  surpassed,  and  you  shall 
not  be  ignorant  of  him  any  longer.” 
With  that  he  read  passages  of  "Aln- 
wick Castle,”  "Marco  Bozzaris,”  and 
several  shorter  poems. 

As  often  happens  in  literature,  the 
poem  by  which  Halleck  is  best  known 
may  almost  be  termed  a by-product! 
When  written  it  was  not  held  in  high 
esteem  by  its  author.  One  evening  he 
left  at  the  lodgings  of  a friend  his 
"Marco  Bozzaris,”  and  on  the  margin 
were  his  words,  "Will  this  do?”  He 
little  thought  that  the  verse  would 
rank  as  one  of  the  best  martial  lyrics 
ever  written;  that  it  would  be  trans- 


lated into  many  languages,  and  that 
millions  of  his  countrymen  thereafter 
would  recall  his  words  as  among  the 
most  thrilling  memories  of  their  youth. 
I still  vividly  remember  the  thrill  with 
which  I early  approached  the  climax 
in  the  stanza: 

An  hour  passed  on — the  Turk  awoke; 

That  bright  dream  was  his  last; 

He  woke — to  hear  his  sentries  shriek. 

To  arms ! they  come ! the  Greek ! the  Greek ! 
He  woke — to  die  midst  flame,  and  smoke. 
And  shout,  and  groan,  and  sabre-stroke. 
And  death-shots  falling  thick  and  fast 
As  lightnings  from  the  mountain-cloud; 
And  heard,  with  voice  as  trumpet  loud, 
Bozzaris  cheer  his  band: 

“Strike — till  the  last  armed  foe  expires; 
Strike — for  your  altars  and  your  fires; 
Strike — for  the  green  graves  of  your  sires; 
God — and  your  native  land!” 

And  then  that  solemn  concluding 
stanza: 

Come  to  the  bridal-chamber,  Death! 

Come  to  the  mother,  when  she  feels. 

For  the  first  time,  her  first-born’s  breath; 

Come  when  the  blessed  seals 
That  close  the  pestilence  are  broke. 

And  crowded  cities  wail  its  stroke; 

Come  in  consumption’s  ghastly  form. 

The  earthquake  shock,  the  ocean  storm; 
Come  when  the  heart  beats  high  and  warm. 
With  banquet-song,  and  dance  and  wine; 
And  thou  are  terrible — the  tear, 

The  groan,  the  knell,  the  pall,  the  bier; 

And  all  we  know,  or  dream,  or  fear 
Of  agony,  are  thine. 

But  to  the  hero,  w'hen  his  sword 
Has  won  the  battle  for  the  free. 

Thy  voice  sounds  like  a prophet’s  word; 
And  in  its  hollow  tones  are  heard 
The  thanks  of  millions  yet  to  be. 

In  this  connection  occurs  a pleas- 
antry indulged  by  the  facetious  Hal- 
leck in  a letter  to  General  Wilson,  af- 
terwards his  biographer.  Speaking  of 
the  story  printed  in  the  papers  that 
"Marco  Bozzaris”  had  been  written  by 
him  on  a wager  with  his  wife — he  be- 
ing a confirmed  old  bachelor — he  says: 

My  position  seems  to  be  the  reverse  of 
that  of  the  gentleman  in  “Joe  Miller”  who, 
when  a friend  said  to  him,  “I  was  not 
aware  until  recently,  of  your  having  been 

horsewhipped  by  Mr.  , last  June,” 

answered,  “Indeed,  I knew  it  at  the  time!” 


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177 


In  a letter  answering  one  of  his  crit- 
ics. Halleck  adds  this  pleasantry: 

As  John  Wilson  saiu,  when  he  knocked  a 
man  down  at  Ambleside,  I hope  to  make 
myself  understood  now. 

After  the  publication  of  his  first  vol- 
ume in  1827,  the  bank  clerk  found  him- 
self in  that  dangerous  position — a fa- 
vorite in  society.  While  some  of  us 
might  have  been  spoiled  by  his  “dozen 
invitations  a week/*  Halleck  was  not. 
In  a letter  to  his  sister,  speaking  of  his 
nights  out,  he  said:  “They  do  not  inter- 
fere with  business  or  other  daily  pur- 
suits/* He  adds  this  comment,  which 
will  sound  familiar  to  some  of  you  who 
are  not  distinctively  society  men: 

It  is  pleasant  enough  while  one  is  there, 
but  to  an  indolent  person,  hardly  enough  to 
compensate  for  the  trouble  of  dressing. 

The  bank  clerk  could  not  resist  the 
temptation  to  pleasantry  even  on  the 
occasion  of  a brother  poet's  death,  to 
which  occasion  he  gives  a touch  of  bus- 
iness, by  alluding  to  death  as — 

The  debt,  the  only  one, 

A poet  ever  pays. 

After  eighteen  years  with  Jacob 
Barker  as  confidential  clerk,  the  bank- 
er met  with  reverses  which  compelled 
him  to  let  Halleck  go. 

That  Halleck’s  value  as  a banker  was 
not  perceptibly  affected  by  his  verse- 
making  habit  may  be  inferred  from 
Mr.  Barker's  tribute  to  his  associate. 
Years  afterward,  he  wrote: 

Mr.  Halleck  was  so  useful  that  it  would 
have  been  difficult  for  me  to  have  done 
without  him. 

In  1832,  Halleck  entered  the  count- 
ing-house of  John  Jacob  Astor,  then 
reputed  to  be  the  richest  man  in  Amer- 
ica. For  sixteen  years  he  enjoyed  the 
entire  confidence  of  his  employer.  To 
the  millionaire  banker’s  credit,  it 
should  be  said  that  he  took  pleasure  in 
letting  the  world  know  that  he  felt 
honored  by  the  friendship  of  Irving 
and  Halleck,  and  that  their  wealth  of 
intellect  was  regarded  by  him  as  an 
2 


offset  to  their  inequalities  of  fortune 
and  opportunity. 

The  traditional  modesty  of  our  poet 
was  illustrated  at  a dinner  given  the 
literary  men  of  New  York,  at  which 
Irving  read  a letter  from  Rogers  prais- 
ing Halleck’s  verse.  The  letter  was 
followed  by  cries  for  “Halleck.”  A 
friend  said,  “For  God’s  sake,  Fitz,  get 
on  your  feet!”  But  the  diffident  Hal- 
leck clung  to  his  chair,  for  the  very 
good  reason — which  some  few  of  you 
may  possibly  understand — that,  when 
he  undertook  to  speak  on  his  legs,  as  he 
once  remarked,  “the  brains  ran  to  his 
heels.” 

Halleck  could  indulge  in  cutting  sat- 
ire as  well  as  pleasantries.  Tucker- 
man  relates  a rejoinder  by  Halleck 
which  shows  the  man’s  contempt  for 
artificial  distinctions.  He  was  a mem- 
ber of  a select  club  that  dined  together 
at  the  old  City  Hotel  on  Broadway. 
One  day  when  a sudden  silence  fol- 
lowed the  entrance  of  the  landlord,  it 
was  proposed  to  elect  the  host  a mem- 
ber of  the  club,  that  the  members 
might  talk  freely  when  thus  interrupt- 
ed. The  host  was  an  honest  and  intel- 
ligent man,  a good  fellow,  and  prided 
himself  on  serving  roast  pig  in  a style 
that  would  have  rejoiced  the  heart  of 
Charles  Lamb.  The  only  man  who  op- 
posed the  proposition  was  a merchant 
who  had  made  his  fortune  by  a monop- 
oly on  the  trade  in  bristles  for  brushes. 
His  objection  was  that  Boniface  could 
roast  a pig  but  was  not  a fit  associate 
for  gentlemen.  Halleck  coolly  retort- 
ed that  he  could  see  no  essential  differ- 
ence between  spurs  won  from  roasting 
a porker  or  those  won  by  selling  his 
bristles.  Amid  the  laughter  of  his  con- 
freres, the  landlord  was  elected. 

Astor  died  in  1848,  remembering  his 
associate  with  a rather  meagre  legacy — 
an  annuity  of  $200;  but  the  bachelor 
at  58  found  no  reason  to  complain — 
certainly  none  when,  soon  after,  Wil- 
liam B.  Astor  added  a gift  of  $10,000 
which  sum  with  his  own  savings  and 
the  annuity  left  the  bachelor  free  from 
sordid  cares. 

The  friendly  and  familiar  relation 


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THE  BANKERS  MAGAZINE. 


between  banker  and  bard  is  shown  by 
a remark  Halleck  once  made  when  As- 
tor  refused  to  subscribe  to  a charitable 
object,  on  the  ground  that  at  present 
he  had  no  money.  Halleck  coolly  re- 
marked, “Mr.  Astor,  if  you’re  out  of 
money,  I’ll  endorse  your  note  for  a 
few  hundred  dollars!” 

General  Wilson  says  Astor  once  in- 
formed him  that  Halleck  was  an  ex- 
cellent man  of  business — rapid,  reli- 
able in  figures  and  with  an  excellent 
memory  for  all  transactions  that  came 
under  his  notice;  a favorite  with  all  his 
associates,  regular  in  attendance,  reach- 
ing the  counting-room  at  eight,  or  very 
soon  after,  and  always  leaving  precise- 
ly at  two  o’clock. 

Thirty-eight  years  after  the  youth- 
ful Halleck  left  Guilford,  the  man  of 
affairs  returned  to  his  old  home  to 
spend  his  last  days.  The  record  he  had 
made  for  himself  as  a man  of  business 
was  that  he  was  never  absent  from  the 
banking-house  for  many  days  at  a time; 
never  taking  even  a fortnight’s  vaca- 
tion. 

At  a dinner  given  Halleck  by  The 
Century  Club  of  New  York,  in  1853, 
William  Cullen  Bryant,  who  presided, 
spoke  of  Halleck  as  the  American  Hor- 
ace, crediting  him  with  having  the  same 
gayety  and  grace  in  his  satire  and  the 
same  curious  felicity  in  his  lyrics. 

Halleck’s  modesty  and  aversion  to 
sham  remained  with  him  to  the  last. 
When  solicited  by  a pretentious  profes- 
sor for  support  as  a lecturer  and  for 
references  on  architecture,  he  smilingly 
replied  that  he  had  never  read  but  one 
work  on  architecture,  and  that  was 
“The  House  That  Jack  Built.” 

Halleck  enjoyed  repeating  the  com- 
ment of  a shrewd  merchant,  that  a poet 
is  “a  man  who  has  soarings  after  the 
infinite,  and  divings  after  the  unfath- 
omable, but  never  pays  cash.” 

Halleck’s  farewelJ  visit  to  the  city 
he  loved  so  well,  in  October,  1 867,  was 
saddened  by  the  certainty  that  he 
would  never  see  his  friends  again.  To 
his  devoted  friend  and  biographer. 
General  Wilson,  his  last  words  were: 
“If  we  never  meet  again,  come  and  see 


me  laid  under  the  sod  of  my  native  vil- 
lage.” On  the  22d  day  of  November. 
’67,  Fitz-Greene  Halleck,  at  the  age  of 
77,  was  buried  in  the  village  cemetery ; 
his  venerable  sister  and  cousin,  both 
eighty  years  old,  were  the  chief  mourn- 
ers. But  there  were  hundreds  of  vil- 
lagers and  literary  and  business  friends 
from  the  metropolis  to  whom  his  death 
was  a deep  sorrow.  The  poet  had  at 
last  found,  as  his  favorite  Spenser  says: 

The  porte  of  reste  from  troublous  toyle. 

The  world's  sweet  inn  from  paine  and 
wearisome  turmovle. 

Edmund  Clarence  Stedman,  1833- 
1908. — Among  American  bankers  of 
our  day  no  one  has  reflected  upon  lit- 
erature so  much  of  dignity  and  glory 
as  Edmund  Clarence  Stedman,  whose 
life  closed  on  the  18th  of  January 
last.  Stedman  is  one  of  the  few  per- 
manently great  poets  of  America.  He 
is  more  than  that:  he  Is  the  foremost  of 
America’s  literary  critics.  Stedman’s 
literary  appreciations  are  as  much  a 
part  of  the  prose  literature  of  our  time 
as  were  the  Hazlitts’  in  their  time.  His 
“Victorian  Poets,”  published  in  1875, 
is  as  much  alive  as  it  was  a year  after 
its  appearance.  On  this  much  be-writ- 
ten  theme  he  has  left  us  by  far  the  most 
keenly  critical  and  at  the  same  time 
most  kindly  appreciative  work  that  has 
found  its  way  into  print.  This  was  fol- 
lowed in  1886  by  his  equally  able,  and, 
for  him — because  of  his  lack  of  ample 
perspective — more  difficult  work,  “The 
American  Poets.”  The  third  of  his 
great  critical  works,  “The  Nature  and 
Elements  of  Poetry,”  appeared  in 
1892. 

Of  the  many  library  collections  of 
English  verse  of  the  last  century, 
Stedman’s  “Anthology”  is  perhaps  the 
most  thumb-worn.  While  the  relative 
space  given  this,  that  and  the  other  poet 
in  any  anthology  must  necessarily  be 
more  or  less  disappointing  to  the  reader 
who  has  his  favorites — and  who  has 
not? — yet  the  general  judgment  is  that, 
with  a banker’s  close  and  critical  esti- 
mate of  values,  he  did  his  work  well — 
better  than  most  students  of  literary 


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THE  BANKER  IN  LITERATURE. 


17  9 


values  could  have  done.  As  a poet  Sted- 
inan  had  a fineness  of  touch  somewhat 
like  that  of  Thomas  Bailey  Aldrich 
and  Richard  Watson  Gilder;  but  yet  in 
quality  it  is  unlike  that  of  any  other 
American  poet.  Like  Mr.  Aldrich  and 
Mr.  Gilder,  the  banker-poet  of  America 
had  demonstrated  the  fact  that  a poet 
can  be  distinctively  American  without 
being  outlandish ! 

Stedman  was  born  in  Hartford  in 
1 833.  He  entered  Yale  at  20.  While 
there  he  foreshadowed  his  career  by 
winning  a first  prize  in  poetry.  Like 
Shelley,  his  student  career  was  fore- 
shortened by  the  faculty;  but,  unlike 
Shelley,  he  didn’t  let  the  foreshortening 
seriously  affect  his  outlook  on  the 
world.  In  1869  the  Yale  authorities 
tardily  repented  their  severity,  and 
though  he  had  long  before  ceased  to 
need  or  care  for  honor,  he  was  re- 
stored to  his  class  roll  and  given  the 
master’s  degree.  In  1863,  after  a suc- 
cessful career  a,s  a war  correspondent 
for  the  New  York  “World,”  he  suf- 
fered financial  reverses  which  inclined 
him  to  give  up  journalism  that  he  might 
put  money  in  his  purse.  He  therefore 
took  that  sure  road  to  wealth — the 
banker’s  gilded  way ! Twelve  years  of 
prosperity  satisfied  him.  Before  he 
had  had  time  to  acquire  the  lust  for 
power  through  wealth,  possibly  feeling 
the  first  encroachments  of  the  pluto- 
cratic madness  of  our  time,  he  forsook 
the  strenuosity  of  Wall  Street  for  the 
peaceful  shades  of  retirement,  and  the 
first  substantial  product  of  his  retire- 
ment was  the  “Victorian  Poets.”  The 
poem  which  best  reveals  the  banker- 
poet  behind  the  lines  is  his  “Pan  in 
Wall  Street” — a happy  blending  of  the 
Greek  style  and  the  American  spirit: 

PAN  IN  WALL  STREET. 

Just  where  the  Treasury’s  marble  front 
Looks  over  Wall  Street’s  mingled  nations: 
Where  Jews  and  Gentiles  most  are  wont 
To  throng  for  trade  and  last  quotations; 
Where,  hour  by  hour,  the  rates  of  gold 
Outrival,  in  the  ears  of  people. 

The  quarter-chimes,  serenely  tolled 
From  Trinity’s  undaunted  steeple, — 


Even  there  I heard  a strange,  wild  strain 
Sound  high  above  the  modern  clamor. 
Above  the  cries  of  greed  and  gain, 

The  curbstone  war,  the  auction's  hammer; 
And  swift,  on  Music’s  misty  ways. 

It  led,  from  all  this  strife  for  millions, 

To  ancient,  sweet-do-nothing  days 
Among  the  kirtle-robed  Sicilians. 

And  as  it  stilled  the  multitude. 

And  yet  more  joyous  rose,  and  shriller, 

I saw  the  minstrel,  where  he  stood 
At  ease  against  a Doric  pillar: 

One  hand  a droning  organ  played. 

The  other  held  a Pan’s-pipe  (fashioned 
Like  those  of  old)  to  lips  that  made 

The  reeds  give  out  that  strain  impas- 
sioned. 

’Twas  Pan  himself  had  wandered  here 
A-strolling  through  this  sordid  city, 

And  piping  to  the  civic  ear 
The  prelude  of  some  pastoral  ditty! 

The  demigod  had  crossed  the  seas, — 

From  haunts  of  shepherd,  nymph,  and 
satyr. 

And  Syracusan  times, — to  these 

Far  shores  and  twenty  centuries  later. 

A ragged  cap  was  on  his  head; 

Hut — hidden  thus — there  was  no  doubting 
That,  all  with  crispy  locks  o'erspread, 

His  gnarled  horns  were  somewhere  sprout- 
ing; 

His  club-feet,  cased  in  rusty  shoes. 

Were  crossed,  as  on  some  frieze  you  see 
them, 

And  trousers,  patched  of  divers  hues. 
Concealed  his  crooked  shanks  beneath 
them. 

He  filled  the  quivering  reeds  with  sound. 
And  o’er  his  mouth  their  changes  shifted, 
And  with  his  goat’s-eyes  looked  around 
Where'er  the  passing  current  drifted; 

And  soon,  as  on  Trinacrian  hills 

The  nymphs  and  herdsmen  ran  to  hear 
him. 

Even  now  the  tradesmen  from  their  tills, 
With  clerks  and  porters,  crowded  near 
him. 

The  bulls  and  bears  together  drew 

From  Jauncey  Court  and  New  Street 
Alley, 

As  erst,  if  pastorals  be  true. 

Came  beasts  from  every  wooded  valley; 
The  random  passers  stayed  to  list, — 

A boxer  Aegon,  rough  and  merry, 

A Broadway  Daphnis,  on  his  tryst 
With  Nais  at  the  Brooklyn  Ferry. 

A one-eyed  Cyclops  halted  long 
In  tattered  cloak  of  army  pattern; 

And  Galatea  joined  the  throng, — 


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THE  BANKERS  MAGAZINE. 


A Mowsy,  apple-vending  slattern; 

While  old  Silenus  staggered  out 

From  some  new-fangled  lunch-house 
handy. 

And  hade  the  piper,  with  a shout, 

To  strike  up  Yankee  Doodle  Dandy! 

A newsboy  and  a peanut  girl 

Like  little  fauns  began  to  caper; 

His  hair  was  all  in  tangled  curl. 

Her  tawny  legs  were  bare  and  taper; 

And  still  the  gathering  larger  grew', 

And  gave  its  pence  and  crowded  nigher, 
While  aye  the  shepherd-minstrel  blew 
His  pipe,  and  struck  the  gamut  higher. 

O (heart  of  Nature,  beating  still 

With  throbs  her  vernal  passion  taught 
her, — 

Even  here,  as  on  the  vine-clad  hill, 

Or  by  the  Arethusan  water! 

New  forms  may  fold  the  speech,  new  lands 
Arise  within  these  ocean-portals, 

But  Music  waves  eternal  wands, — 
Enchantress  of  the  souls  of  mortals! 

So  thought  I, — but  among  us  trod 
A man  in  blue,  with  legal  baton. 

And  scoffed  the  vagrant  demigod, 

And  pushed  him  from  the  step  I sat  on. 
Doubting  1 mused  upon  the  cry, 

“Great  Pan  is  dead  !*’ — and  all  the  people 
Went  on  their  ways; — and  clear  and  high 
The  quarter  sounded  from  the  steeple. 

SOME  NOTABLE  BANKERS  IN 
FICTION. 

III. 

Having  dipped  here  and  there  into 
history  and  biography,  in  the  develop- 
ment of  my  subject,  let  me  conclude 
with  a few  references  to  the  banker 
as  he  stands  out  in  fiction  and  poetry — 
in  other  words,  as  he  has  impressed 
himself  on  the  minds  of  workers  in  the 
fields  of  imagination. 

Bankers  never  were  popular  with  lit- 
erary folk,  for  reasons  best  known  to 
themselves — and  their  bankers  ! Until 
recently  there  were  among  litterateurs 
very  few  financially  “well-fixed”  Rog- 
erses, Lubboeks,  Hallecks  and  Sted- 
mans.  Most  of  them  in  their  time  found 
it  harder  to  look  the  banker  in  the  face 
than  stand  in  the  presence  of  kings. 

Speed,  in  his  sixteenth  century  his- 
tory of  Great  Britain,  speaks  of  a his- 
toric character  as  “embogging  himself 
in  the  Bankers  and  Usurers  Bookes.” 


Benbrigge,  a century  later,  thus  sat- 
irizes them:  “Neither  Banke  nor 

Bankers  . . . can  conceive  they 

suffer  any  losse  by  . . . lending  to 

the  poor  freely;  because  what  they  can 
even  give  : . . is  lent  in  usury  to 

the  Lord.” 

The  Bank  of  Venice,  founded  in 
1171,  came  too  late  to  serve  Shakes- 
peare’s Merchant  of  Venice.  Had  the 
bank  been  in  operation,  doing  business 
for  legitimate  profits,  and  not,  as  was 
Shylock,  “for  blood,”  the  Doge  and 
his  Council  of  Ten  would  have  accept- 
ed his  sureties  and  loaned  him  the  “nec- 
essary ducats” — and  Shylock’s  occupa- 
tion would  have  been  gone. 

Dickens’s  Bankers. — I recall  four 
bankers  in  Dickens’s  aggregation  of 
characters — each  one  in  a class  by 
himself.  Turning  to  “Little  Dorrit” 
we  renew  our  acquaintance  with  Mr. 
Meagles,  retired  banker.  Dear  old 
Meagles,  good-natured  and  benevolent, 
but  priding  himself  most  of  all  on 
being  a practical  man,  and  therefore  not 
so  kind  and  benevolent  as  he  seems ! 
We  follow  him  through  Italy  in  pursuit 
of  health  for  his  darling  daughter,  and 
in  turn  pursued  by  unrelenting  officers 
of  quarantine.  After  all  sorts  of  ex- 
periences he  gravely  declares  that  he’d 
as  soon  have  a spit  put  through  him 
and  be  stuck  upon  a card  in  a collec- 
tion of  beetles  as  lead  the  life  he  has 
of  late  been  leading,  shut  up  in  quaran- 
tine. Parting  company  with  his  fellow 
sufferers  at  Genoa,  he  banquets  them, 
making  a speech  which  concludes  with 
a bumper  of  champagne.  Of  all  the 
minor  characters  in  “Little  Dorrit.” 
dear,  old  unpractical  Meagles,  with  his 
insistence  that  he  is  practical  or  noth- 
ing, is  the  most  enjoyable. 

In  the  same  novel,  we  make  the  ac- 
quaintance of  Mr.  Murdle,  a veritable 
master  of  high  finance,  who,  like  many 
a master  in  the  creative  art  of  making 
something  out  of  nothing — or  a resem- 
blance to  something  of  solid  value  out 
of  little,  or  nothing,  and  that  diluted 
with  water — goes  to  smash,  dragging 
down  with  him  all  sorts  and  conditions 


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of  people  who  have  banked  upon  his 
name.  Though  the  most  silent  of  men. 
Murdle’s  strange  weakness  is  society. 
He  gives  dinners  and  parties  with  great 
industry  and  method.  He  never  seems 
to  be  having  a good  time,  going  through 
the  formal  part  of  his  social  duties  as  a 
solemn-visaged  penitentiary  warden 
might  listen  to  prisoners*  complaints. 
Men  and  women  are  wont  to  pursue 
him  with  trusts  of  all  sorts — and,  with 
seeming  indifference,  he  accepts  them 
all — when  accompanied  by  the  cash. 

When  the  Murdle  equipage  stops 
before  the  newly  rich  Mr.  Dorrit’s  ho- 
tel door,  there  is  commotion  in  the 
hotel.  Everybody  turns  out  to  see  the 
great  banker.  Hear  Dickens  ironically 
rave  over  him : 

Murdle!  O ye  sun,  moon  and  stars,  the 
great  man ! The  rich  man,  who  had  in  a 
manner  revised  the  New  Testament,  and 
already  entered  into  the  Kingdom  of 
Heaven.  As  he  went  up  stairs,  people  were 
already  posted  on  the  lower  stairs,  that  his 
shadow  might  fall  upon  them  when  he  came 
down. 

Murdle  has  come  to  offer  his  services 
as  an  investor  of  Mr.  Dorrit’s  inherited 
fortune,  modestly  drawing  from  Mr. 
Dorrit  profound  gratitude — and  cash. 
The  ride  by  the  side  of  the  great  bank- 
er is  to  the  vain  old  man  the  realiza- 
tion of  a rapturous  dream — “to  find 
himself  set  aloft  in  this  public  car  of 
triumph,”  on  his  way  to  golden  Lom- 
bard Street! 

When  Murdle  commits  suicide  the 
general  verdict  as  to  the  cause  is 
“pressure.”  Everybody  averse  to  work 
echoes  the  word  “pressure.”  This  was 
before  the  more  picturesque  term 
“brain-storm”  had  been  invented.  The 
first  popular  verdict  lasts  several 
weeks,  and  then  the  word  gives  way  to 
the  harsh  terms  “forgery”  and  “rob- 
bery.” Finally,  he,  the  object  of  adu- 
lation, the  patron  of  patrons,  “the  shin- 
ing wonder,  the  new  consteUation  to  be 
followed  by  the  wise  men  bringing 
gifts,”  ...  is  recalled  as  “simply 
the  greatest  forger  and  the  greatest 
thief  that  ever  cheated  the  gallows” 
— an  experience  in  a measure  paralleled 


by  a recent  case  of  suicide  in  our  own 
state. 

Let  us  take  a snap-shot  at  Josiah 
Bounderby,  the  Coketown  banker,  a 
prominent  character  in  “Hard  Times.*' 
Bounderby  is  a fit  son-in-law  of  Grad- 
grind — a big  man  made  out  of  coarse 
material,  which  seems  to  have  stretched 
to  make  so  much  of  him.  The  skin  of 
his  face  seems  so  strained  as  to  hold 
his  eyes  open  and  lift  up  his  eye-brows; 
apparently  inflated  like  a balloon,  and 
ready  to  start.  Bounderby  is  always 
bragging  of  his  former  ignorance  and 
poverty. 

If  there’s  any  one  thing  Dickens 
liked  better  than  another  it’s  a feast — 
whether  it  be  a club  affair,  a wedding 
or  a christening,  with  the  British  ac- 
companiment— a speech,  stupid  or  clev- 
er— the  stupider  the  better ! At  the 
wedding  breakfast  of  Joe  Bounderby, 
the  bachelor  of  fifty,  and  Louise  Grad- 
grind,  a twenty-year-old  sacrifice  to 
filial  dutifulness,  Bounderby  rises  and 
thanks  those  present  for  the  honor 
done  him  and  his  fair  bride,  but  he 
warns  them  against  expecting  a speech 
from  a man  of  his  antecedents.  He  is 
only  a plain,  blunt  man  “who  when  he 
sees  a post  says  'that’s  a post,*  and 
when  he  sees  a pump  says  ‘that’s  a 
pump,*  and  is  not  to  be  got  to  call  a 
post  a pump,  or  a pump  a post,  or 
either  of  them  a toothpick.”  “However,” 
he  adds,  “if  I feel  a little  independent 
when  I look  around  this  table  to-day, 
and  reflect  how  little  I thought  of  mar- 
rying Tom  Gradgrind’s  daughter  when 
T was  a ragged  street-boy  who  never 
washed  his  face  unless  it  was  at  a pump, 
and  that  not  oftener  than  once  a fort- 
night, I hope  I may  be  excused.”  He 
admits  he  is  very  glad  he  has  married 
Tom  Gradgrind’s  daughter.  He  has 
watched  her  bringing  up  and  believes 
she  is  worthy  of  him!  “At  the  same 
time,”  he  adds,  “not  to  deceive  you,  I 
believe  I am  worthy  of  her.  So  I thank 
you,  bn  both  our  parts,  for  the  good 
will  you  have  shown  towards  us;  and 
the  best  wish  I can  give  the  unmarried 
part  of  the  present  company  is  this:  T 
hope  every  bachelor  may  find  as  good 


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a wife  as  I have  found.  And  I hope 
every  spinster  may  find  as  good  a hus- 
band as  my  wife  has  found.'  " 

Mr.  Lorry,  in  the  "Tale  of  Two  Cit- 
ies," is  a delightful  picture  of  a man 
of  deep  feeling  encased  in  the  formali- 
ties of  his  calling  and  held  to  strict  ser- 
vice by  respect  entertained  for  a great 
house.  We  first  see  him  in  a coffee 
house  in  Dover,  where  he  is  waiting  the 
coming  of  Miss  Manette,  whom  he  is 
to  escort  to  Paris.  He  is  promptness 
itself,  the  loud  ticking  of  his  watch  un- 
der a flapped  waistcoat  sonorously 
preaching  a sermon  on  punctuality.  His 
face,  habitually  suppressed,  is  lighted 
by  a pair  of  moist  bright  eyes  that  it 
must  have  cost  their  owner  in  years 
gone  by  some  pains  to  drill  to  the  com- 
posed and  reserved  expression  of  Tell- 
son’s  Bank.  His  face,  though  lined, 
bears  few  traces  of  anxiety.  "But," 
says  the  philosopher  behind  the  story, 
"perhaps  the  confidential  bachelor 
clerks  in  Tellson’s  bank  were  princi- 
pally occupied  with  the  cares  of  other 
people;  and  perhaps  second-hand  cares, 
like  second-hand  clothes,  come  easily 
off  and  on." 

In  delivering  himself  of  his  message, 
by  way  of  preface,  Mr.  Lorry  says: 
"In  your  reception  of  it,  don’t  heed 
me  any  more  than  if  I was  a speaking 
machine — truly,  I am  not  much  else." 

Farther  on,  speaking  of  feelings,  Mr. 
Lorry  says:  "Feelings!  I have  no  time 
for  them.  I pass  my  whole  life,  Miss, 
in  turning  an  immense  pecuniary  man- 
gk-.” 

I suspect  the  author  of  "Tale  of  Two 
Cities"  must  have  had  many  a chuckle 
over  his  cleverness  in  picturing  the  un- 
consciously humorous  character  of  Mr. 
Lorry,  of  Tellson  & Company’s  bank. 

Thackeray's  Newcome  Brothers. 
— Thackeray's  popular  novel,  "The 
Newcomes,"  brings  to  the  front  Clive 
Newcome's  uncles,  eminent  London 
bankers.  Arthur  Pendennis,  who  is 
telling  the  story,  writes: 

If  all  the  private  accounts  kept  by  those 
worthy  bankers  were  like  mine,  there  would 
have  been  no  Newcome  Hall  and  Park 
Lane,  Marble  Head  and  Bryenstone  Square. 


Arthur  managed  by  great  self-denial 
to  maintain  a balance  of  two  or  three 
guineas  at  the  bank,  so  that  his  account 
might  remain  open;  and  he  fancied  the 
clerks  grinned  when  he  drew  a check. 
Rather  than  face  that  awful  counter, 
he  would  send  Larkins,  or  Mrs.  Flana- 
gan, for  the  money.  "As  for  entering 
the  private  parlour  at  the  back,  where- 
in behind  the  glazed  partition,"  he 
"could  see  the  bald  heads  of  the  New- 
come  Brothers  engaged  with  other  cap- 
italists," he  "would  as  soon  have 
thought  of  volunteering  to  take  an  arm- 
chair in  a dentist’s  studio." 

The  late  Major  Pendennis,  uncle  of 
Arthur,  used  to  reprove  the  youth  for 
his  fears,  assuring  him  that  "bankers 
like  to  keep  every  gentleman’s  ac- 
count," and  that  it  w*as  a mistake  to 
suppose  they  were  civil  only  to  their 
great  moneyed  clients.  "Look  at  me,” 
he  would  say,  proudly.  "I  go  in  to 
them  and  talk  to  them  whenever  I am 
in  the  city.  It  looks  well,  sir,  to  stand 
well  with  your  banker." 

The  Major  advises  Arthur  to  at- 
tend Lady  Ann  Xew’come's  evening  par- 
ties. "Between  ourselves,  my  good  fel- 
low," the  shrewd  old  Mentor  would 
say,  "Mrs.  Newcome’s  parties  are  not 
altogether  select ; but  it  gives  a man 
a good  air  to  be  seen  at  his  banker's 
house." 

Arthur  accepts  the  advice  and  at- 
tends, whenever  he  is  bidden  to  the 
feast,  but  he  always  fancies,  from  Lady 
Newcome’s  patronizing  manner  to  him, 
that  she  knows  he  has  but  thirty  shill- 
ings on  deposit. 

Sir  Brian  Nwcomc  has  a bald  head 
and  light  hair,  a short-cropt  whisker,  a 
buff  waistcoat,  very  neat  boots  and 
hands.  He  is  bland,  and  smiling,  yet 
dignified.  Hobson  Newcome  is  like 
his  brother,  but  more  so ! He  allows 
his  red  whiskers  to  grow  wherever  na- 
ture has  planted  them.  He  wears  thick 
shoes  with  nails  in  them,  with  tight 
trousers.  He  affects  the  country  gen- 
tleman. One  of  his  eccentricities  is 
the  habit  of  chewing  corn  or  beans.  "If 
the  day  w\as  fine,  he  would  say  it  was 
good  weather  for  hay;  if  it  rained 


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the  country  wanted  rain ; if  it  was 
frosty,  'No  hunting  to-day,  Tompkins, 
my  boy'/’  and  so  forth. 

He  is  a better  business  man  than 
his  stately  brother,  and  he  is  wont 
to  admit  that  a man  must  get  up  very 
early  in  the  morning  to  take  him  in. 
The  two  make  a good  foil  for  that  best 
of  all  Thackeray's  old-men  characters. 
Colonel  Newcome. 

Chari.?:®  Readers  Story  of  “An 
Old  Bank." — That  inimitable  racon- 
teur, Charles  Reade,  has  injected  into 
“Love  Me  Little,  Love  Me  Long"  a 
story  of  “An  Old  Bank,"  which  is  as 
clever  in  its  way  as  is  Victor  Hugo’s 
“Battle  of  Waterloo”  in  its  way — and 
has  one  point  in  its  favor  which  cannot 
be  made  for  the  brilliant  episode  in 
“Les  Miserables,” — it  is  true  to  his- 
tory. Introducing  to  the  reader  Mr. 
Richard  Hardie,  a formidable  contest- 
ant for  the  hand  of  Miss  Fountain,  the 
author  presents  him  as  a man  with  a 
genius  for  common-sense  in  finance, 
and  proves  it,  too,  by  relating  his  suc- 
cessful part  in  the  financial  crisis  of 
1817,  and  by  his  masterly  analysis  of 
the  panics  of  1719  and  1793. 

A Meredith  Creation. — George 
Meredith,  in  “Rhoda  Fleming,”  tells  an 
uncanny  story  of  an  old  and  trusted 
confidential  clerk,  in  Boyne's  Bank, 
London,  whose  imagination  plays  sad 
havoc  with  his  reason.  Anthony  Hack- 
but never  counted  the  cash,  but  his 
mind  became  excited  over  the  thought 
of  possession — not  so  much  for  himself 
as  for  the  respect  he  would  command 
as  a moneyed  man.  His  tastes  were 
simple,  his  income  was  ample,  his  sav- 
ings were  considerable,  and  yet  his  im- 
agination would  picture  the  glories  of 
possession.  His  weakness  was  in  the 
desire  that  men  should  fall  down  and 
worship  him — a weakness  with  its  in- 
conveniences. For  instance,  his  farm- 
er brother  vainly  sought  his  help  and 
came  to  the  conclusion  that  his  brother 
was  a miser.  Anthony’s  great  fear  was 
that  he  might  die  first,  and  so  reveal 
to  his  brother  the  mild  fraud  he  had 
been  practicing.  He  preferred  to  be 


thought  miserly  than  poor.  You  may 
have  occasionally  met  an  Anthony 
Hackbut  in  the  course  of  your  banking 
experience ! 

One  day  while  Anthony  was  carrying 
two  great  bags  of  gold,  exulting  in  even 
temporary  possession,  he  met  his  niece 
Rhoda,  who  having  been  led  to  sup- 
pose the  gold  was  his,  begged  him  to 
quit  his  miserliness  and  give  her  the 
money  she  greatly  needed  to  help  the 
man  in  the  case.  The  old  man's  mind 
became  dazed  by  the  girl’s  flattering 
assumption  of  his  wealth,  and  not  be- 
ing a miser  at  heart,  in  a moment  of 
frenzy  he  slit  the  sides  of  the  bags 
with  his  penknife,  and  out  came  the 
gold  in  torrents.  “Uttering  laughter 
that  clamored  fiercely  in  her  ears  for 
long  minutes  afterwards,  the  old  man 
brandished  the  empty  bags  and  sprang 
out  of  the  room.”  His  reason,  weak- 
ened by  long  arguments  with  the  devil 
over  the  gold,  had  given  way. 

Miss  Mulock’s  Run  on  the  Bank. 
— Do  you  remember  the  run  on  the 
bank  in  “John  Halifax”?  At  a 
banquet  giv^n  by  Halifax,  news  came 
that  a London  bank  with  which  the  lo- 
cal bank  had  placed  its  surplus  funds 
had  failed.  The  village  banker,  an 
aged  man,  fainted  on  hearing  the  news. 
General  consternation  ensued. 

The  run  on  Jessop’s  bank  was  inev- 
itable. Halifax  looked  up,  when  spok- 
en to,  “to  see,  instead  of  those  two 
lines  of  happy  faces,  faces  already 
gathering  in  troubled  groups,  faces 
angry,  sullen  or  miserable.” 

You  can  see  the  picture;  the  pain- 
fully silent  departure  of  the  guests, 
“formal  congratulations  given  writh 
pale  lips  and  wandering  eyes;  brusque 
adieux,  as  some  of  the  more  honest  or 
less  courteous  showed  but  too  obviously 
how  cruelly,  even  resentfully,  they  felt 
the  inequalities  of  fortune;  hasty  de- 
partures. full  of  dismay  that  rejected 
angrily  every  shadow  of  consolation.” 

The  scene  changes  to  the  front  of 
the  village  bank,  where  are  collected 
“a  great  eager,  but  doggedly  quiet 
crowd,”  each  with  an  “individual  ter- 
ror to  hide,”  or  “an  individual  interest 


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to  fight  for,  and  cared  not  a straw  for 
that  of  any  one  else/' 

John's  eyes  wander  pitfully  over  the 
heaving  mass  of  anxious  faces,  blue 
with  cold.  He  finds  the  banker  in  his 
home,  bowed  with  grief  and  dejection. 
He  asks  and  is  given  the  broken-spir- 
ited man's  confidence,  relieved  to  find 
the  bank  solvent,  though  seriously  crip- 
pled and  with  almost  no  funds  to  meet 
the  demand. 

The  gentry  are  impatiently  waiting 
the  banker  and  the  foremost  men  in 
the  crowd  are  hammering  at  the  front 
door  of  the  bank.  Halifax  writes  a 
notice,  and  Jessop  and  he  sign  it,  as- 
suring the  crowd  that  the  bank  will  re- 
open without  fail  at  one  o'clock.  John 
rides  over  to  Coltham  and  returns  on 
time,  with  a great  ugly,  grimy  canvas 
bag  full  of  gold.  Many  who  have 
been  scrambling  to  reach  the  counter, 
put  their  notes  back  in  their  pockets 
and  walk  out.  Others,  chiefly  women, 
get  their  notes  cashed,  picking  up  the 
gold  with  trembling  hands.  A few 
who  came  to  close  accounts  change  their 
minds,  and  even  make  deposits.  The 
run  is  over. 

Our  Own  David  Harum. — Without 
coming  down  to  the  fiction  of  " Fren- 
zied Finance,*'  most  of  it  ephemeral,  I 
will  presume  upon  your  patience  just 
a little  further,  by  referring  to  our  mu- 
tual friend,  "David  Harum.”  You  re- 
member how  some  ten  years  ago  the 
word  went  from  mouth  to  mouth. 
"Have  you  read  David  Harum”? 
And  if  the  answer  was  "no,”  then  came 
the  quick  rejoinder,  "You  must  read 
it.”  Well-nigh  forgotten  is  the  tem- 
porarily heart-rending  love  story;  but, 
in  the  foreground  of  the  memory  is  the 
author  of  the  new  Golden  Rule — which 
I see  I shall  not  have  to  repeat!  That 
inimitable  first  chapter  sold  the  book. 
There  is  nothing  in  American  humor 
more  clever  than  this  character  pic- 
ture. The  applicability  of  David's 
sayings  to  the  personal  side  of  the 
banking  business  impresses  one  who  has 
listened  to  the  various  phases  of  hu- 
man— very  human — nature  as  uncon- 


sciously revealed  by  the  men  and  wom- 
en who  take  their  turn  with  the  bank- 
er. Let  me  recall  a few  of  David’s 
best  "horsey”  aphorisms: 

Ev’ry  hoss  c’n  do  a thing  better  ’n’  spryer 
if  he’s  ben  broke  to  it  as  a colt. 

When  you  got  a balker  to  dispose  of,  you 
can’t  always  pick  an’  choose. 

“Was  it  a horse?”  asked  Mrs.  Bixbee,  re- 
ferring to  the  animal  the  deacon  had  worked 
off  on  David. 

“W’aal,”  David  replied,  “mebbe  it  had  ben 
some  time,  but  at  that  partic’lar  time  the 
only  thing  to  determine  that  fact  was  that 
it  wa’n’t  nothing  else.” 

It’s  slow  work  sittin’  behind  a balky 
hoss. 

Some  hosses  will  balk  with  some  folks, 
an’  not  with  others. 

After  I’d  got  the  hoss  where  I c’d  handle 
him  I begun  to  think  I’d  had  some  int’rcstin* 
experience,  an’  it  wa’n’t  scursely  fair  to  keep 
it  all  to  myself. 

He  [the  deacon]  wanted  that  hoss  more’n 
a cow  wants  a calf. 

Describing  Timson,  the  clerk  whose 
place  young  John  had  come  to  take. 
David  said: 

Allowed  he’d  been  d rawin’  the  hull  load, 
did  he?  Waal  sir,  the  truth  on’t  is  he 
never  come  to  a hill  yet,  ’ft  wa’n’t  more’n 
a foot  high,  but  what  I had  to  git  out  an’ 
push;  nor  never  struck  a turn  in  the  road 
but  what  I had  to  take  him  by  the  head  and 
lead  him  to  it. 

David  was  honesty  and  liberality  it- 
self in  his  personal  relations  with  his 
neighbors;  but,  as  he  explained  to  the 
bewildered  John: 

A hoss-trade  aint  like  anythin’  else.  A 
feller  may  be  straighter  ’n  a string  in 
ev’rythin’  else,  an’  never  tell  the  truth — 
that  is,  the  hull  truth — about  a hoss.  I 
trade  hosses  with  hoss-traders.  They  all 
think  they  know  as  much  as  I do,  an’  I 
dunno  but  what  they  do.  They  haint  learnt 
no  d iff’ rent  anyway,  an’  they’ve  had  chances 
enough.  If  a feller  come  to  me  that  didn’t 
think  he  knowed  anythin’  about  a hoss,  an’ 
wanted  to  buy  on  the  square,  he’d  git, 
fur’s  I know,  square  treatment.  But  when 
one  o’  them  smart  Alecks  comes  along  and 
cal’lates  to  do  up  old  Dave,  why  he’s  got  to 
take  his  chances,  that’s  all. 


Without  further  wearying  you  with 
a formal  conclusion,  let  me  simply  say 
in  closing  that  if,  for  a single  hour 


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THE  BANKER  IN  LITERATURE. 


185 


only,  I have  succeeded  in  diverting  my 
banker  friends,  enabling  them  to  forget 
for  the  time  “the  cares  that  infest  the 
day,”  and  if,  at  the  same  time,  I have 
in  any  measure  widened  the  range  of 
their  vision  and  given  them  a some- 
what broader  view  of  the  possibilities 
within  the  range  of  their  great  calling, 
I shall  feel  well  paid  for  the  several 
over-time  hours  I have  put  upon  this 
apparently  unworked  field. 


IDENTIFICATION  CARDS. 

IN  Germany  the  postoffice  issues,  at  a 
nominal  expense,  identification  cards, 
which  can  be  obtained  without  the 
least  trouble  at  the  postoffice  in  the  place 
where  the  applicant  resides.  The  cards  are 
useful  in  obtaining  registered  or  other  mail 
and  for  purposes  of  identification  generally. 


POSTAL  CHECKS  IN  GERMANY. 

CONSUL  WILLIAM  B ARDEL,  of  Bam- 
berg, reports  that  since  the  passage 
of  the  law*  by  the  Reichstag,  in  the 
latter  part  of  February,  1908,  to  promote 
the  payments  of  accounts  by  bank  checks 
throughout  Germany,  the  Bundesrath  (Fed- 
eral Council),  in  order  to  meet  the  require- 
ments of  the  middle  classes  and  small  busi- 
ness people,  resolved  to  introduce  the  fol- 
lowing system  of  paying  accounts  by  postal 
checks: 

Any  individual,  firm,  public  authority,  or 
organization  can  participate  in  this  postal- 
check  system.  Application  for  participation 
can  be  made  at  a postal-check  bureau  or  at 
a regular  post-office.  The  applicant  has  to 
make  an  original  deposit  of  not  less  than 
100  marks  ($33.80),  which  has  to  remain  the 
minimum  balance  of  his  account.  There  is 
to  be  no  limit  as  to  the  maximum  extent  of 
a deposit. 

The  depositor  can  dispose,  at  any  time,  of 
the  balance  due  him  over  the  fixed  deposit 
of  100  marks,  by  drawing  checks  or  by  a 
request  for  transfer  of  certain  sums  from 
his  account  to  other  postal-check  accounts. 
Ihe  postal-check  bureau  is  required  to  not- 
iiy  each  depositor  of  payments  received  or 
made  for  him.  A depositor  has  the  right  to 
withdraw  his  account  entirely  at  any  time. 
In  ease  of  unseemly  use  of  the  account  the 
postal-check  bureau  has  the  privilege  ot 
canceling  the  account.  The  Government  is 


not  to  derive  any  financial  benefit  from 
this  postal-check  system,  as  only  the  cost 
of  it  is  to  be  covered  by  small  dues. 

Costs  of  Service — Deposits  Guaranteed  bt 
Government. 

The  dues  to  be  collected  for  the  service 
are  to  be  as  follows: 

(1)  For  every  cash  deposit  of  500  marks 
($119),  or  any  part  thereof,  5 pfennigs 
(1.19  cents);  (2)  for  withdrawals  in  cash 
one-eighth  "pro  mille”  of  the  amount  with- 
drawn and  a fixed  tax  of  5 pfennigs;  (3) 
for  any  transfer  from  one  postal-check 
account  over  to  another,  the  amount  of  3 
pfennigs  (.714  cent). 

If  the  account  of  a depositor  exceeds  600 
book  entries  per  annum  there  will  be 
charged,  besides  the  dues  mentioned,  an 
extra  due  of  7 pfennigs  (1.67  cents)  for 
every  entry  to  be  made  beyond  600.  The 
collection  of  dues  and  of  the  charges  for 
check  forms  is  made  by  deductions  on  the 
respective  accounts.  The  notifications  of  the 
check  bureaus  and  of  the  post-offices  to  the 
depositors,  as  also  between  the  check 
bureaus  and  the  post-offices,  are  to  be  con- 
sidered official  business,  and  therefore  free 
of  postage. 

For  a start,  postal  bureaus  are  to  be 
established  in  Breslau,  Berlin,  Cologne, 
Danzig,  Frankfort,  Hamburg,  Hanover, 
Karlsruhe,  and  Leipzig. 

In  order  not  to  have  it  appear  that  this 
postal  check  system  is  to  encroach  on  the 
business  of  savings  banks  and  credit  associa- 
tions, the  deposits  will  bear  no  interest. 

The  Reichbank  (Imperial  Bank)  assumes 
the  administration  of  the  money  for  ac- 
count, and  at  the  risk  of  the  Government. 
Considering  that  the  balances  of  these  ac- 
counts have  to  be  held  ready  for  withdrawal 
at  any  and  all  times,  a large  part  of  the 
money  safeguarded  by  the  Reichsbank  will 
have  to  be  invested  in  values  which  can 
easily  be  converted;  particularly  in  gilt- 
edged  inland  or  foreign  notes,  payable  in 
gold.  In  order  that  the  sources  from  which 
these  deposits  will  principally  come  will  be 
benefited  the  most,  a part  of  the  fund  is  to 
be  given  by  the  Reichsbank,  against  sufficient 
security  and  interest,  to  institutions  for 
advancement  of  industry,  commerce,  and 
agriculture. 

This  decree  so  far  only  covers  the  imperial 
postal  territory,  to  which  Bavaria  and 
Wurttemberg  do  not  belong  as  yet;  but  it 
is  expected  that  by  January  1,  1909,  when 
this  system  is  to  be  introduced,  the  two 
named  countries  will  introduce  the  same 
system  and  on  the  same  basis  as  this.  After 
a few  years  of  practical  experience  the 
Reichstag  will  be  enabled  to  form  this  de- 
cree into  a law. 


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MASSACHUSETTS  SAVINGS  INSURANCE  AND 
ANNUITY  BANKS. 

By  Louis  D.  Brandeis. 


r | A H E project  of  attaching  a Life  In- 
surance  Department  to  savings 
banks,  which  was  described  in  the 
Bankers  Magazine  of  December. 
1 p0(),  has  been  enacted  into  law  and  is 
now  being  put  into  operation. 

The  savings  bank  at  Whitman,  in 
Southeastern  Massachusetts,  was  the 
first  to  establish  an  Insurance  and  An- 
nuity Department,  and  the  first  policy 
was  issued  on  June  22,  1908.  The 
People’s  Savings  Bank  of  Brockton,  of 
which  Ex-Governor  Douglas — a strong 
supporter  of  the  movement — is  presi- 
dent, will  soon  follow.  A rapid  ex- 
tension of  the  system  throughout  the 
State  is  probable.  For  under  the  law 
any  savings  bank  may  serve  its  com- 
munity as  well  by  becoming  an  agency 
for  another  savings  insurance  and  an- 
nuity bank  as  by  establishing  a de- 
partment of  its  own;  and  a bank  act- 
ing as  agent  merely  is  relieved  of  the 
necessity  of  providing  the  guaranty 
funds  and  of  considerable  special  in- 
surance work  required  of  the  principal. 

The  law  also  provides  for  the  ap- 
pointment of  other  agencies,  for  in- 
stance, manufacturing,  mercantile,  or 
other  business  concerns,  as  well  as 
trade  and  other  organizations;  so  that 
the  people  in  any  part  of  the  State 
may  secure  the  privileges  of  the  new 
system  without  awaiting  action  by  the 
local  savings  banks. 

The  introduction  of  the  Savings 
Bank  Insurance  System  was  designed 
primarily  to  furnish  wage-earners  with 
cheaper  life  insurance,  by  doing  away 
with  the  huge  waste  incident  to  solicita- 
tion and  weekly  house  to  house  collec- 
tion of  premiums  under  the  system 
practiced  by  the  industrial  insurance 
companies.  The  pamphlet  recently  is- 
sued bv  the  Massachusetts  State  Actu- 
ary. entitled  “Who  will  pay  your  wages 
when  you  are  old  and  grey?”  points 
1^0 


clearly  to  the  large  saving  and  the 
great  benefits  which  will  accrue  to  the 
wage-earner  under  the  Savings  Bank 
Insurance  System.  But  the  annuity 
feature  of  the  plan  is  apt  to  prove  of 
even  greater  benefit  not  only  to  the 
workingman,  but  also  to  the  employer 
and  the  rest  of  the  tax-payers. 

In  every  industrial  community  the 
necessity  of  introducing  some  adequate 
system  of  old  age  annuities  is  becoming 
recognized.  Germany  adopted  com- 
pulsory old  age  insurance,  dividing  the 
burden  between  the  employer,  the  em- 
ployee and  the  State.  England  is  turn- 
ing to  old  age  pensions  leaving  the  bur- 
den to  be  borne  by  general  taxation, — a 
kind  of  poor  relief.  Neither  system 
can  be  deemed  satisfactory.  Under  the 
Massachusetts  Savings  Bank  Insurance 
and  Annuity  Law  an  attractive  alterna- 
tive is  offered.  The  old  age  insurance 
is  voluntary  instead  of  compulsory ; the 
superannuated  working  man  becomes 
independent  instead  of  dependent; 
general  taxation  is  to  be  relieved  of  the 
rapidly  increasing  charge  of  the  “vet- 
eran of  industry”  instead  of  being  fur- 
ther burdened. 

The  . Massachusetts  plan  can,  of 
course,  succeed  only  through  educating 
the  community  to  a recognition  of  both 
the  necessity  of  making  some  adequate 
provision  for  the  wage-earner’s  old  age 
and  the  great  advantages  which  the 
savings  bank  system  affords.  People 
must  be  made  to  appreciate  the  obvious 
truth  that  the  cost  of  living  includes  a 
daily  setting  aside  of  such  sum  as  will 
adequately  provide  against  the  con- 
tingencies of  the  future — as  by  life  in- 
surance against  premature  death,  and 
by  old-age  insurance  against  superan- 
nuation; that  such  pro  rata  amount  is  a 
fixed  charge  upon  the  workingman’s 
living  as  much  as  the  percentage  for 
depreciation  is  a fixed  charge  upon  a 


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MASS.  SAVINGS  INSURANCE  AND  ANNUITY  BANKS. 


187 


INSURANCE  AND  ANNUITY  POLICY. 

I xs  usance  Payable  at  Death  Prior  to  Age  65,  Annuity  Commencing  at  Age  65. 

The  figure*  below  show  the  most  you  will  have  to  pay,  and  the  least  you  will  yet.  All 
the  profits  go  to  the  policy  holders. 


Age  next 

AMOUNT 

OF  INSURANCE 

AND  ANNUITY 

FOR  MONTHLY  PREMIUM  OF 

Birth- 

25c. 

50c. 

75c. 

$1.00 

$1.25 

day. 

Ins. 

Ann. 

Ins. 

Ann. 

Ins. 

Ann. 

Ins. 

Ann. 

Ins.  Ann, 

18.... 

.$124 

$24 

$248 

$49 

$372 

$75 

$496 

$99 

19 

. 119 

24 

238 

48 

357 

72 

476 

95 

20... . 

. 115 

23 

230 

46 

345 

69 

460 

92 

21.... 

. Ill 

22 

222 

44 

333 

67 

444 

89 

22. . . . 

. 107 

21 

214 

43 

321 

64 

428 

86 

103  20  206  41  309  62  41 2 82 

100  20  200  40  300  60  400  80  $500  $100 

96  19  192  38  288  58  384  77  480  96 

93  18  186  37  279  56  372  74  465  93 

89  17  178  36  267  54  356  71  445  89 


28  86  17  172  34  258  52  344  69  430  86 

29  83  16  166  33  249  50  332  66  415  83 

30  80  16  160  32  240  48  320  64  400  80 

31  77  15  154  31  231  46  308  62  385  77 

32  74  14  148  30  222  44  296  60  370  74 

33  71  14  142  28  213  43  284  57  355  71 

34  68  13  136  27  204  41  272  54  340  68 

35  65  13  130  26  195  39  260  52  325  65 

36  62  12  124  25  186  37  248  50  310  62 

37  60  12  120  24  180  36  240  48  300  60 

38  57  11  114  23  171  34  228  46  285  57 

39  54  10  108  22  162  33  216  43  270  54 

40  51  10  102  21  153  31  204  41  255  51 

41  49  9 98  20  147  29  196  39  245  49 

42  46  9 92  19  138  28  184  37  230  46 

43  44  8 88  18  132  26  176  35  220  44 

44  41  8 82  17  123  25  164  33  205  41 

45  39  7 78  16  117  23  156  31  195  39 

46  36  7 72  15  108  22  144  29  180  36 

47  34  6 68  14  102  20  136  27  170  34 

48  32  6 64  13  96  19  128  26  160  32 

49  30  6 60  12  90  18  120  24  150  30 

50  27  5 54  11  81  16  108  22  135  27 


manufacturers  machinery;  that  any  by  giving  to  the  saver  all  that  his 
workingman  who  does  not  make  this  money  can  earn,  and  to  make  it  corn- 
provision  is  not  self-supporting,  but  is  mon  by  providing  opportunities  of  sav- 
preparing  burdens  for  his  family  or  ing  money  as  numerous  as  the  existing 
the  community  to  bear;  and  that  the  opportunities  for  wasting  it. 
savings  banks  with  their  extended  fune-  The  Massachusetts  savings  banks 
Hons  furnish  an  adequate  opportunity  have  no  stockholders;  and  the  Insur- 
for  making  the  necessary  provision.  ance  and  Annuity  Department  will  be 

The  Massachusetts  plan  is  in  its  es-  operated  wholly  for  the  benefit  of  the 
sence  merely  an  attempt  to  make  the  policyholders,  just  as  the  depositors 
people  thrifty.  But  it  is  not  an  idle  now  get  the  benefit  of  all  the  earnings 
attempt  to  merely  preach  that  virtue,  made  from  ordinary  deposits.  The 
The  plan  aims  to  make  saving  popular  State  Actuary  shows  that  under  this 


23 

24 

25 

26 


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188 


THE  BANKERS  MAGAZINE. 


Savings  Bank  System  a young  man  can 
get  life  insurance  plus  an  annuity  for 
less  than  he  has  hitherto  paid  to  the 
industrial  insurance  companies  for  in- 
surance alone. 

“Suppose  you  are  25  years  old  and 
pay  to  the  savings  bank  $1.30  each 
month  and  your  neighbor  who  is  the 
same  age  pays  $1.35  each  month  to  the 
insurance  company. 

“When  you  reach  age  65,  you  will 
have  no  more  deposits  to  make.  In- 
stead of  making  deposits  you  will  be- 
gin to  receive  an  annuity  of  $100. 

“While  you  are  enjoying  the  fruits 
of  your  saving,  your  neighbor  will  still 
be  paying  $1.35  every  month  to  the  in- 
surance company  and  he  will  have  to 
continue  paying  this  amount  until  he  is 
75  years  old. 

“Which  would  you  rather  be — your 
neighbor  or  yourself  ?” 

The  maximum  premiums  to  be 
charged  and  the  minimum  benefits  to 
be  received  on  such  a policy  are  shown 
in  the  accompanying  table. 

As  stated,  the  above  figures  repre- 
sent the  maximum  premiums  and  the 
minimum  benefits.  All  the  profits  of 
the  Insurance  and  Annuity  Depart- 
ment, except  so  far  as  applied  to  build- 
ing up  guaranty  funds,  are  to  be  dis- 
tributed among  the  policyholders. 

Widespread  education  as  to  the  ad- 
vantages of  the  Savings  Bank  Insur- 
ance and  Annuity  System  is  of  course 
essential  to  its  success.  But  in  this  nec- 
essary work  long  strides  have  already 
been  taken.  The  long  and  enlightening 
campaign  which  preceded  the  passage  of 
the  act  resulted  in  a wide  discussion  of 
the  subject  in  every  part  of  the  State. 
Nearly  three  hundred  labor  unions, 
many  business  and  charitable  organ- 
izations, and  many  of  the  leading  man- 
ufacturers, merchants  and  financiers  of 
Ma  ssachusetts  joined  in  urging  upon 
the  Legislature  the  passage  of  the  law. 
Daniel  G.  Wing,  president  of  the  First 
National  Bank  of  Boston;  Thomas  L. 
Livermore,  vice-president  of  the  Calu- 
met & Hecla  Mining  Co.,  and  James  J. 
Storrow,  of  Lee,  Higginson  & Com- 
pany, are  among  the  vice-presidents  of 


the  League  formed  to  promote  the 
movement.  James  L.  Richards,  presi- 
dent of  the  Massachusetts  Gas  Com- 
panies, and  P.  F.  Sullivan,  president 
of  the  Boston  & Northern  Street  Rail- 
way, are  among  the  members  of  the 
General  Committee,  and  Robert  Win- 
sor,  of  Kidder,  Peabody  & Company; 
F.  B.  Sears,  vice-president  of  the 
Shawmut  National  Bank,  and  many 
other  bankers,  are  members  of  the 
League. 


FINISHING  THE  WORK. 

HERE  is  some  praise  of  Mr.  Taft  from 
the  “Wall  Street  Journal”: 

William  Allen  White  coined  a 
most  felicitous  phrase  when  he  said  that 
Secretary  Taft  was  just  the  man  to  clean 
up  the  White  House  desk;  that  is  to  say,  to 
finish  President  Roosevelt’s  unfinished  w'ork. 

What  he  meant  was  that  what  was  need- 
ed now  in  the  White  House  was  a man  not 
so  much  to  originate  a new  policy,  and  to 
strike  out  as  a pioneer  in  a new  field  of 
endeavor,  but  one  who  will  soberly  though 
firmly  finish  up  the  business  that  has  been 
begun  and  thus  put  the  country  in  a posi- 
tion where  it  might,  if  it  desired,  start  on  a 
new  movement  of  national  development. 

Not  only  is  Secretary  Taft  eminently  fit- 
ted to  perform  this  work,  but  it  is  a work 
which  the  country  needs  to  have  done.  The 
people  of  the  United  States  are  in  no  mood 
to  retrace  steps  already  taken,  to  undo  re- 
forms already  begun  or  to  return  to  old 
conditions,  but  they  do  need  time  in  which 
to  finish  up  the  work  which  has  been  begun 
and  to  adapt  themselves  to  the  new  condi- 
tions which  they  have  ordered.  Cleaning  up 
the  desk  is  now  the  next  great  work. 

This  would  seem  to  imply  that  Mr.  Taft 
intends  to  use  a hand  of  steel  in  a velvet 
glove  in  dealing  with  the  offending  corpora- 
tions, discarding  the  sledge-hammer  em- 
ployed by  Mr.  Roosevelt. 


THE  NATIONAL  BANK  OF  CHINA. 

THE  doubling  of  the  capital  of  the 
National  Bank  of  China  at  Pekin  is 
indicative  of  the  financial  progress 
w’hich  is  being  made  not  only  at  this  point 
but  elsewhere  throughout  the  Empire.  The 
capital  stock  now  is  about  equal  to  $3,500,- 
000  and  will  be  increased  to  $7,500,000  or 
10,000,000  taels  of  100  taels  a share.  For- 
eign subjects  are  not  admitted  as  share- 
holders. The  bank  is  the  National  Bank  of 
China  in  the  sense  of  performing  financial 
operations  for  the  Imperial  Government,  al- 
though the  power  to  issue  notes  will  not 
be  invested  in  this  bank.  It  will  have 
branches  in  various  treaty  ports  and  large 
cities. 


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THE  SPECULATORS  AND  THE  BANKS 


By  Earl  Dean  Howard,  Assistant  Professor  in  Economics,  Northwestern 

University. 


CUP  POSE  the  brokers  on  the  ex- 
***  changes  of  the  country  were  re- 
quired to  make  public  with  every  trans- 
action, the  name  of  the  person  for 
whom  they  are  dealing  and  a statement 
whether  the  client  is  trading  for  cash 
or  on  margin ; what  would  be  the 
effect? 

Among  thoughtful  people  the  idea 
is  growing  that  speculation,  especially 
in  the  stock  exchanges,  is  one  of  the 
fundamental  causes  of  economic  dis- 
turbances and  that  one  of  the  most 
serious  defects  of  our  currency  and 
banking  system  is  the  assistance  and 
stimulation  it  gives  to  speculation.  This 
aspect  of  the  matter  has  been  cropping 
cut  constantly  in  the  speeches  in  Con- 
gress, in  the  President’s  message,  and 
in  bills  introduced  in  Congress ; the 
discussion  which  has  been  aroused  will 
not  rest  until  some  action  is  taken. 

Speculation  is  that  sort  of  buying 
and  selling  which  does  not  help  to 
move  goods  along  the  channels  of  in- 
dustry and  commerce  from  the  pro- 
ducer to  the  consumer ; the  profit  gained 
is  not  a part  of  that  increment  of  value 
added  to  the  goods  by  the  increase  in 
their  utility,  as  they  pass  along  toward 
the  consumer,  but  comes  from  adventi- 
tious fluctuations  of  price  due  to  nat- 
ural or  artificial  causes.  Legitimate 
speculation  gets  a profit  from  the  nec- 
essary and  inevitable  fluctuations  of 
price  produced  by  sudden  changes  in 
the  demand  or  supply;  its  function  is 
to  lessen  as  much  as  possible  the  fluctu- 
ations and  to  distribute  the  effects  in 
the  least  harmful  way.  Illegitimate 
and  objectionable  speculation  increases 
fluctuations  and  creates  them  when 
there  is  no  natural  reason  for  them.  It 
makes  prices  abnormal,  usually  ab- 
normally high  at  first,  followed  by  a 
period  when  they  are  abnormally  low. 

The  evils  of  speculation  referred  to 
herein  are  economic.  “Bucket-shop- 


ping” and  mere  gambling  on  price 
fluctuations  are  not  included  in  this; 
though  reprehensible  in  themselves  and 
injurious  to  public  morals  they  are  in- 
nocent of  any  effect  on  prices.  It  is 
only  when  property  is  actually  bought 
and  sold,  when  the  demand  and  supply 
are  altered,  that  price  changes  result. 
The  charge  brought  against  illegitimate 
speculation  is  that  it  creates  an  un- 
stable condition  of  demand  and  supply, 
accompanied  by  abnormal  prices,  the 
effect  of  which  is  to  artificially  stimu- 
late the  production  of  goods  for  a 
time  by  increasing  profits.  This  ap- 
parently is  a most  desirable  thing  and 
were  there  no  further  consequences, 
speculation  might  be  hailed  as  a ben- 
eficent source  of  prosperity.  Unfor- 
tunately, however,  a period  of  pros- 
perity founded  upon  abnormally  high 
prices  carries  with  it  its  own  destruc- 
tion and  the  period  of  depression  which 
follows  brings  an  economic  loss  more 
than  sufficient  to  offset  the  gain  of  the 
preceding  period. 

Specui.  \tjon  Furthered  by  Credit. 

Credit  is  the  instrument  of  specula- 
tion. A credit  is  a postponed  payment 
of  cash,  carrying  the  promise,  expressed 
or  implied,  of  future  payment.  Credit 
enables  exchanges  of  property  to  be 
made  without  the  use  of  cash  for  the 
time  being.  If  cash  were  required  in 
every  transaction,  a general  speculative 
rise  of  prices  would  be  impossible,  for 
whenever  the  demand  for  one  item  was 
increased  there  must  of  necessity  be  a 
decrease  in  the  demand  for  something 
else.  Credit  dispenses  with  the  use  of 
cash  and  releases  demand  from  its  de- 
pendence upon  cash,  thus  permitting  a 
rise  of  general  prices  limited  only  by 
the  amount  of  credit  which  can  be  kept 
afloat.  Anybody  who  can  get  credit 
can  buy,  and  liberal  buying  causes  a 
rise  of  prices.  Large  profits  are  made 

1S9 


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THE  BANKERS  MAGAZINE. 


by  simply  buying  on  speculation,  the 
cupidity  of  the  people  is  aroused,  the 
banks  stand  ready  to  furnish  the  credit; 
and  the  “boom”  continues  until  a de- 
mand arises  for  the  liquidation  of  the 
outstanding  credit.  Liquidation  re- 
quires cash  and  the  demand  for  cash, 
postponed  for  so  long,  appears  with 
cumulated  force.  Just  as  before  every- 
body wanted  to  exchange  credit  for 
goods,  so  now  everybody  wants  to  ex- 
change goods  and  credit  for  cash  in 
order  to  pay  their  debts;  whereas  in 
the  first  period,  competitive  bidding 
forced  prices  to  an  abnormal  height,  in 
the  second  the  pressure  to  sell  prop- 
erty forced  prices  to  an  abnormally 
low  level. 

Credit  is  the  offender  against  whom 
must  be  charged  all  the  evil  results  of 
speculation  and  bank-credit  must  bear 
the  major  share  of  the  blame.  Credit, 
sometimes  his  own  but  usually  the 
credit  of  a bank  acquired  by  exchang- 
ing personal  credit  for  bank  credit,  en- 
ables the  speculator  to  buy  and  hold 
property  until  the  holders  of  the  credit 
demand  that  it  shall  be  liquidated. 

A bank  is  a market  for  credit.  It 
takes  in  personal  credit  which  cannot 
circulate  as  a medium  of  exchange  and 
gives  in  exchange  for  it  bank  credit 
which  can  circulate  in  the  form  either 
of  a bank-note  or  a deposit  credit 
against  which  checks  may  be  drawn. 
When  people  draw  cash  from  a bank 
by  presenting  either  notes  or  checks 
just  that  much  bank  credit  is  liquidated. 
In  good  times  when  prices  are  rising 
and  values  are  secure  there  is  small  de- 
mand for  liquidation  and  the  volume  of 
outstanding  credit  grows  much  to  the 
profit  of  the  bank ; however,  when 
prices  turn  downward  and  the  move- 
ment for  liquidation  begins,  and  the 
demand  for  cash  cumulates,  many  banks 
are  unable  to  pay  and  fail. 

Nobody  would  advocate  the  'aboli- 
tion of  credit,  however,  because  it  fos- 
tered speculation;  one  might  just  as 
well  abolish  fire  because  houses  were 
sometimes  burned  down.  Credit  is  a 
substitute  for  money  and  without  it  the 
development  of  business,  far  greater  in 


proportion  than  the  increase  in  the 
supply  of  gold,  would  have  brought  a 
declining  level  of  prices  and  a per- 
petual industrial  stagnation.  Further- 
more, the  abolition  of  credit  or  any 
considerable  portion  of  it,  would  mean 
economic  chaos  for  a term  of  years,  a 
fall  of  prices  to  a fraction  of  their 
present  figures,  and  the  ruin  of  all 
debtors.  Credit  we  must  have,  but  a 
regulated  credit  and  not  an  instrument 
with  which  the  fool  or  the  self-seeker 
may  inflict  grave  damage  periodically 
on  the  whole  community. 

Every  statesman  and  student  who 
grapples  with  the  problem  of  the  mal- 
adjustment of  economic  forces — the 
panic  or  crisis  and  all  the  phenomena 
which  follow  it,  the  shut-down  of  busi- 
ness, non-employment  and  distress 
among  the  working  class,  bankruptcy 
and  financial  difficulty  for  nearly 
everybody — must  take  into  account  the 
cause  and  the  instrument  of  the  cause: 
speculation  and  credit.  Every  pro- 
posed change  in  our  currency  or  bank- 
ing laws  should  be  considered  from 
this  point  of  view;  will  it  foster  or 
hinder  speculative  fluctuations  of 
prices  ? 

The  larger  part  of  the  speculation 
on  the  New  York  exchanges  is  done  by 
margin  trading.  The  customer  fur- 
nishes a margin  of  ten  to  twenty  per 
cent,  of  the  value  of  the  security  and 
a Wall  Street  bank  furnishes  credit 
for  the  balance,  the  stock  being  pur- 
chased by  a broker  and  deposited  as 
collateral  security  with  the  bank.  The 
bank  has  practically  bought  the  stock 
on  speculation  but  the  risk  is  taken  by 
the  customer  who  puts  up  the  margin. 
This  system  of  margin  trading  enables 
persons  without  a large  amount  of 
funds  to  speculate  with  bank-credit,  to 
create  a demand  and  affect  the  prices 
of  property  which  is  bound  to  bring 
about  disasterous  results  involving  the 
whole  industrial  world.  Furthermore, 
the  bank-credit  which  their  operations 
engross  is  withheld  from  trade  because 
the  speculator  can  afford  to  pay  a 
higher  rate  of  interst  than  the  mer- 
chant or  manufacturer. 


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THE  SPECULATORS  AND  THE  BANKS. 


191 


The  bank  is  the  auxiliary  of  com- 
merce. providing  the  means  by  which 
property  of  all  kinds,  whether  goods  or 
capital,  is  passed  from  hand  to  hand, 
gaining  in  utility  and  usefulness  at 
each  operation.  The  bank  is  like  the 
railroad  and  bank-credit  is  like  freight 
cars,  but  instead  of  moving  goods  from 
place  to  place,  it  moves  them  from 
hand  to  hand.  Suppose  our  railroads 
at  a time  when  traffic  was  heaviest 
should  employ  its  equipment  in  haul- 
ing a certain  quantity  of  goods  back- 
ward and  forth  over  the  line,  without 
accomplishing  any  economic  service, 
while  all  the  time  shippers  were  clam- 
oring for  cars.  This  is  exactly  w’hat 
happens  when  the  New  York  banks 
lend  to  speculators  their  own  credit 
and  all  they  can  absorb  from  the  coun- 
try banks. 

How  Illegitimate  Speculation 
Might  be  Stopped. 

Every  person  not  directly  interested 
in  the  business  will  probably  admit 
that  what  we  have  called  illegitimate 
speculation,  as  contrasted  with  legiti- 
mate speculation,  is  a dangerous  ele- 
ment in  our  industrial  and  financial 
system  and  should  be  eradicated  if 
possible;  but  the  practical  impossibility 
of  discriminating  between  illegitimate 
and  legitimate  speculation  or  even  be- 
tween necessary  trading  and  specula- 
tion, and  the  danger  of  doing  more 
harm  than  good  by  any  remedial  legis- 
lation, has  given  pause  to  the  reformer 
in  this  field. 

The  w'orst  feature  of  illegitimate 
speculation  is  manipulation;  that  is. 
buying  and  selling  for  the  purpose  of 
changing  the  price  and  deriving  a profit 
therefrom.  Our  present  standard  of 
business  morality  would  scarcely  brand 
this  as  dishonest  although  such  trans- 
actions arc  harmful  to  the  public  in- 
terest. All  too  frequently,  howrever. 
the  manipulator  is  not  satisfied  to 
change  prices  by  simply  buying  and 
selling  but  uses  dubious  devices  to  in- 
fluence the  market;  spreading  false 
rumors  by  means  of  tips  and  newspaper 
paragraphs ; manipulating  dividends 


and  statistics,  if  he  happens  to  be  a 
director  of  the  company;  and  match- 
ing orders  by  giving  one  broker  an 
order  to  sell  and  another  to  buy  the 
same  stock  at  the  same  time. 

The  suggestion  made  at  the  begin- 
ning of  this  article  that  every  trans- 
action on  the  exchanges  be  accompanied 
by  the  fullest  publicity  both  as  to  the 
trader  and  the  manner  of  trading  ought 
to  make  manipulation  impossible, 
especially  if  it  were  reinforced  by  a 
tax  on  every  trade,  as  proposed  by 
Representative  Hepburn,  with  pro- 
visions for  the  examination  of  brokers' 
accounts  by  officials  that  would  prevent 
false  statements  and  dodging.  No 
manipulator  would  care  to  try  the  game 
with  all  the  cards  on  the  table,  for  the 
first  essential  of  manipulation  is  secre- 
cy. Speculation  on  margin  wrould  be- 
come more  hazardous,  for  the  margin 
trader  is  a notoriously  weak  holder  and 
the  technical  condition  of  the  market 
would  be  known  to  everybody.  If 
everybody  had  known  on  May  9.  1901, 
that  it  was  Mr.  Harriman  and  Mr.  Hill 
who  were  bidding  for  the  Northern 
Pacific  stock,  the  market  would  have 
been  spared  the  most  distressing  fea- 
ture# of  that  panic. 

Speculation  is  nourished  on  bank- 
credit;  without  it  the  margin  trader 
would  be  starved  out  and  only  the  spec- 
ulator with  funds  of  his  own  could 
juggle  prices.  Bank-credit  is  based 
on  cash  reserves  and  limited  by  them. 
A considerable  portion  of  the  cash  re- 
serves of  the  national  banks  of  New 
York  represent  the  deposits  of  out-of- 
towm  banks  and  are  a part  of  the  law- 
ful reserves  of  those  banks.  It  is  the 
funds  of  the  country  banks,  drawn 
from  every  part  of  the  country  and 
deposited  in  New’  York  that  form  the 
foundation  upon  which  is  erected  most 
of  the  credit  supplied  to  speculators. 
When  a part  of  these  funds  are  with- 
drawn by  the  depositors,  for  one  rea- 
son or  another,  there  ensues  a strin- 
gency in  the  money  market,  the  call- 
loan  rate  soars,  and  prices  drop.  The 
wrorst  of  it  is  that  the  speculator  is  not 
the  only  one  who  is  hurt  but  every 


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THE  BANKERS  MAGAZINE. 


legitimate  business  depending  upon 
bank-credit  suffers  at  the  same  time 
and  brings  suffering  on  the  whole  com- 
munity. 

Recognizing  the  evil  result  of  using 
these  country  reserves  to  foster  spec- 
ulation, many  persons  would  amend  the 
National  Bank  Act  and  require  every 
national  bank  to  keep  its  full  reserve  in 
its  own  vaults.  Such  a measure  in- 
volves a great  waste  of  credit  resource, 
the  speculator  would  appropriate  more 
of  the  credit  now  utilized  by  commerce, 
and  the  legitimate  business  interests 
would  suffer  in  the  end. 

A Plan  For  Correcting  the  Abuse 
of  Credit. 

The  banks  of  New  York  may  be  di- 
vided into  two  fairly  distinct  classes: 
the  commercial  banks  and  the  financial 
banks.  Commercial  banks  furnish 
credit  to  merchants  and  manufacturers 
to  be  used  in  the  production  and  move- 
ment of  goods;  the  financial  banks  fur- 
nish credit  to  brokers  and  dealers  to 
be  used  in  purchasing  and  holding  se- 
curities which  are  deposited  as  collater- 
al for  the  loans.  The  distinguishing 
feature  of  the  financial  bank  is  the 
collateral  loan.  This  fact  suggests  a 
plan  for  restricting  the  resources  of 
the  speculator  without  at  the  same  time 
placing  any  burden  upon  industry  and 
commerce.  This  plan  might  be  used 
in  conjunction  with  the  suggestion  at 
the  beginning  of  this  article. 

Let  the  national  banks  in  the  three 
central  reserve  cities,  New  York,  Chi- 
cago, and  St.  Louis,  be  divided  into 
classes:  commercial  and  financial. 

Leave  to  the  commercial  national  banks 
all  the  privileges  they  now  enjoy  under 
the  National  Bank  Act,  (except  such 
as  are  hereinafter  stated)  and  in  ad- 
dition permit  them  to  exercise  trust 
company  functions,  such  as  acting  as 
trustee,  administrator,  registrar,  etc., 
also  give  them  authority  to  have  savings 
departments  under  strict  savings  bank 
laws.  This  concession  should  be  grant- 
ed to  better  enable  them  to  compete 
with  the  state  banks  and  trust  com- 
panies. 


No  commercial  bank  shall  make  anv 
loan  or  discount  any  commercial  paper 
for  any  broker  or  any  loan  secured  by 
the  deposit  of  stocks  or  bonds  unless 
such  collateral  is  taken  to  secure  a loan 
already  made,  or  one  the  proceeds  of 
which  are  not  to  be  used  in  trading  up- 
on an  exchange.  Violations  of  this 
prohibition  will  cause  the  bank  to  be 
classified  as  a financial  bank. 

A financial  bank  shall  have  the  right 
to  make  loans  to  brokers  upon  collateral 
security  of  stocks  and  bonds  or  ware- 
house receipts.  However,  they  shall 
not  be  permitted  to  receive  deposits 
from  any  other  bank  or  banker  or  from 
any  trust  company.  They  shall  not 
be  permitted  to  issue  circulation  but 
shall  have  the  right  to  deal  in  bonds 
and  underwrite  issues  of  bonds.  Every 
loan  made  shall  be  posted  in  a public 
place  and  shall  give  the  name  of  the 
borrower,  the  amount,  the  rate  of  dis- 
count, and  the  name  of  the  security. 

No  national  bank  shall  deposit  any 
of  its  funds  in  any  other  institution 
except  a commercial  national  bank  in  a 
central  reserve  city  or  in  a national 
bank  in  any  other  city. 

The  foregoing  provisions  are  an  at- 
tempt to  deal  with  speculation  on  the 
basis  of  present  banking  laws.  It  is 
to  be  hoped  that  in  the  near  future  all 
the  banks  of  the  country  may  be  incor- 
porated and  regulated  under  one  sys- 
tem. Financial  conditions  can  never 
be  thoroughly  controlled  nor  can  the 
speculative  expansion  of  credit  and 
prices  be  eliminated  until  the  state 
banks  and  trust  companies  are  made  to 
conform  to  the  requirements  laid  down 
for  national  banks.  It  is  a great 
anomaly  to  put  strict  limitations  upon 
the  national  banks  and  expect  them  to 
compete  with  unregulated  trust  com- 
panies; hence  in  the  provisions  above, 
we  have  granted  to  the  commercial  na- 
tional banks  the  functions  of  trust 
companies.  It  were  much  better, 
though,  to  deprive  the  trust  companies 
of  banking  functions  which  they  ac- 
quired by  usurpation  until  the  states 
recognized  them  by  statute. 


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A BRIEF  HISTORY  OF  THE  INDUSTRIAL  BANK 

OF  JAPAN. 


Specially  Written  for  The  Bankers  Magazine  by  Motoshi  Kato,  Secretary  of  the 

Industrial  Bank  of  Japan. 

I.  Introduction. 


'T'HE  Nippon  Kogyo  Ginko,  or  the 
A Industrial  Bank  of  Japan,  is 
one  of  the  four  important  banks  in 
Japan.  In  treating  of  its  origin  and 
history,  we  have,  at  first,  to  consider 
the  nature  and  functions  of  these  four 
banks,  and  to  do  this,  however,  re- 
quires some  knowledge  of  the  banking 
system  in  Japan. 


The  Japanese  banking  system  is 
based  upon  the  principle  of  the  divi- 
sion of  labor,  in  pursuance  of  which 
the  Government  established  monetary 
institutions  in  connection  with  com- 
merce, agriculture,  industry  and  for- 
eign trade,  and  everything  was  ar- 
ranged on  the  principle  of  the  differ- 
entiation of  functions.  As  a central 


DR.  JUICH1  SOYEDA 

President  of  the  Industrial  Bank  of  Japan,  was  born  in  1864,  and  was  educated  at  the  Imperial 
University  of  Tokyo,  at  Cambridge,  England,  and  Heidelberg,  Germany.  1881-1887. 

He  was  Vice-Minister  of  State  for  Finance  in  1898,  President  of  the 
Bank  of  Formosa  from  1899  to  1901 ; and  in  March,  1902,  was 
appointed  President  of  the  Industrial  Bank  of  Japan. 

3 193 


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19  i 


THE  BANKERS  MAGAZINE. 


commercial  and  monetary  organ,  the 
Bank  of  Japan  was  established;  as  the 
central  organ  of  foreign  trade,  the 
Yokohama  Specie  Bank;  as  the  central 
organ  of  agriculture,  the  Hypothec 
Bank  of  Japan,  and  as  an  organ  for 
industry  and  negotiable  instruments, 
the  Industrial  Bank  of  Japan  was  or- 
ganized. Separately  these  banks  make 
efforts  to  develop  the  branches  of  work 
assigned  to  them,  but  collectively,  they 
assume  the  function  and  responsibility 
of  effecting  the  economic  prosperity  of 
Japan.  Thus,  it  will  be  observed  that 
the  Bank  of  Japan  aims  at  rediscount- 
ing sound  and  profitable  commercial 
bills;  the  Yokohama  Specie  Bank  at 
supplying  funds  needed  for  the  for- 
eign trade;  the  Hypothec  Bank  at  ad- 
vancing funds  against  the  security  of 
real  estate,  conducive  to  agricultural 
developments,  while  the  object  of  the 
Industrial  Bank  of  Japan  is  to  ad- 
vance money  on  shares  and  stocks,  so 
as  to  further  the  various  industries  of 
Japan. 

II.  Origin  of  the  Industrial  Bank 
of  Japan. 

In  1899*  there  was  a movement  in 
the  Diet  for  the  presentation  of  a draft 
for  regulations  concerning  movable 
mortgage  banking,  and  the  Govern- 
ment was  obliged  to  introduce  the  draft 
which  was  warmly  welcomed  by  the 
Diet.  The  name  given  to  the  proposed 
bank  was  the  Industrial  Bank  of 
Japan,  and  with  various  amendments, 
the  draft  passed  both  houses  of  the 
Diet  on  February  22,  1900,  and  was 
promulgated  under  Law  No.  70,  in 
March  of  the  same  year.  The  reasons 
then  given  by  the  Government  for  the 
introduction  of  such  laws  to  the  Diet 
were  as  follows: 

“The  demand  for  capital  in  this 
country  is  very  large,  and  the  supply  is 
by  no  means  adequate  to  meet  the  re- 
quirements. The  lack  of  capital  is 
keenly  felt  in  railway  and  harbor  con- 
structions and  other  industries,  greatly 
impeding  smooth  economic  develop- 
ment. We  recognize  the  necessity  of 


establishing  a special  monetary  organ 
for  the  transaction  of  shares,  debent- 
ures and  negotiable  bonds,  maintaining 
the  real  value  of  various  securities  and 
thereby  heightening  their  credit  and  in- 
creasing the  supply  of  capital,  all  of 
which  is  conducive  to  the  economic  ex- 
pansion of  Japan.  Under  the  circum- 
stances, it  was  thought  advisable  to  es- 
tablish the  movable  property  mortgage 
bank  with  a view  to  the  adjustment  of 
financial  organs.” 

The  law  relating  to  the  Industrial 
Bank  of  Japan  is  as  follows: 

Law  relating  to  the  Nippon  Kogyo  Ginko. 
(The  Industrial  Bank  of  Japan,  Ltd.) 

CHAPTER  I. 

General  Statement. 

Art.  1.  The  Nippon  Kogyo  Ginko  shall 
be  constituted  a joint  stock  company  and 
have  its  chief  office  in  Tokyo. 

Art.  2.  The  capital  of  the  Nippon  Kogyo 
Ginko  shall  be  seventeen  million  five  hun- 
dred thousand  yen;  which  amount  may  be 
increased  with  the  sanction  of  the  Govern- 
ment. 

Art.  3.  The  amount  of  each  share  of  the 
Nippon  Kogyo  Ginko  shall  be  fifty  yen. 

Art.  4.  The  term  of  business  of  the  Nip- 
pon Gogyo  Ginko  shall  be  fifty  years;  which 
term  may  be  extended  with  the  sanction  of 
the  Government. 

CHAPTER  II. 

Chief  Officers. 

Art.  5.  There  shall  be  one  president, 
one  vice-president,  four  or  more  directors, 
and  three  or  more  auditors  in  the  Nippon 
Kogyo  Ginko. 

Art.  6.  The  president  shall  represent  the 
Nippon  Kogyo  Ginko,  and  superintend  its 
business. 

In  the  event  of  the  office  of  president 
becoming  vacant,  the  vice-president  shall 
discharge  the  duties  of  president. 

The  vice-president  and  directors  shall 
assist  the  president  and  shall  transact  any 
special  business  as  provided  in  the  by-laws. 

The  auditors  shall  inspect  the  business 
of  the  Nippon  Kogyo  Ginko. 

Art.  7.  The  president  and  vice-president 
shall  be  appointed  by  the  Government  from 
among  shareholders  owning  at  least  two 
hundred  shares;  and  the  term  of  office  of  a 
president  and  a vice-president  shall  be  five 
years. 

The  directors  shall  be  appointed  by  the 
Government  from  among  candidates  elected 
at  a general  meeting  of  shareholders,  the 


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HISTORY  OF  THE  INDUSTRIAL  BANK  OF  JAPAN. 


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qualification  of  such  candidates  to  be  owner- 
ship of  at  least  one  hundred  shares  each, 
and  the  number  of  candidates  to  be  twice 
tuat  of  the  directors  to  be  appointed.  The 
term  of  office  of  a director  shall  be  three 
years. 

The  auditors  shall  be  appointed  by  elec- 
tion at  a general  meeting  of  shareholders 
from  among  shareholders  owning  at  least 
sixty  shares  each:  and  the  term  of  office 
of  an  auditor  shall  be  two  years. 

Art.  8.  The  president,  vice-president  and 
directors  may  not  engage,  under  any  cir- 
cumstance whatsoever,  in  any  other  pro- 
fession or  business.  Exception  may  be 
made,  however,  by  special  permission  of 
the  Minister  of  State  for  Finance. 

CHAPTER  III. 

Business. 

Art.  9.  The  business  of  the  Nippon 
Kogyo  Ginko  shall  be  as  follows: 

1.  To  make  loans  on  the  security  of 
national  loan-bonds,  prefectural  and 
municipal  loan-bonds,  or  debentures 
and  shares  of  companies. 

2.  To  subscribe  for,  or  take  over  by 
transfer,  national  loan-bonds,  prefec- 
tural and  municipal  loan-bonds,  or 
debentures  of  companies. 

3.  To  receive  deposits  of  money  and 
undertake  the  custody  of  goods  en- 
trusted to  it  for  safe  keeping. 

4.  To  undertake  trust  business. 

5.  To  discount  bills. 

6.  To  make  loans  on  the  security  of 
estates  (zaidan)  created  by  virtue  of 
special  laws. 

In  the  case  of  bills  to  be  discounted  under 
the  foregoing  clause  5,  national  loan-bonds 
or  prefectural  or  municipal  loan-bonds, 
debentures  or  shares  must  be  presented  as 
collateral  securities  by  the  applicants. 

Art.  10.  The  Nippon  Kogyo  Ginko  may 
devote  its  unemployed  funds  to  the  purchase 
of  national  loan-bonds,  prefectural  or  munic- 
ipal loan-bonds,  or  the  debentures  of  com- 
panies. 

Art.  11.  The  Nippon  Kogyo  Ginko  may 
not  engage  in  any  line  of  business  not 
mentioned  in  this  Law.  This  restriction 
shall  not  apply,  however,  when,  with  the 
permission  of  the  Minister  of  State  for 
Finance,  the  bank  engages  in  banking  and 
other  operations  ancillary  thereto,  which 
are  conducted  in  foreign  countries. 

CHAPTER  IV. 

Debentures. 

Art.  12.  The  Nippon  Kogyo  Ginko  may 
issue  debentures,  provided  that  their  max- 
imum limit  shall  not  exceed  ten  times  the 


amount  of  the  bank’s  paid-up  capital;  nor 
shall  such  debentures  exceed  the  aggregate 
of  the  moneys  the  bank  has  actually  loaned 
out,  of  the  bills  actually  discounted  and  in 
hand  at  the  time,  as  well  as  of  the  national 
loan-bonds,  the  prefectural  or  municipal 
loan-bonds,  and  the  debentures  of  com- 
panies in  its  possession. 

Art.  12-2.  In  the  event  of  supplying 
capital  for  undertakings  of  public  utility 
abroad,  the  bank  may  issue  debentures  with 
the  permission  of  the  Minister  of  State  for 
Finance  without  observing  the  provisions 
of  articles  12  and  15  of  this  law  and  article 
200  of  the  commercial  code. 

The  above-mentioned  undertakings  of 
public  utility  shall  be  determined  by  Im- 
perial Ordinance. 

Art.  13.  The  debentures  issued  shall  be  of 
the  face  value  of  fifty  yen  or  more,  and  un- 
registered; they  may,  however,  be  changed 
into  registered  debentures  at  the  request  of 
subscribers  or  owners. 

Art.  14.  When  the  Nippon  Kogyo  Ginko 
desires  to  issue  debentures,  it  must  obtain 
the  permission  of  the  Minister  of  State  for 
Finance. 

Art.  14-2.  When  the  bank  issues  deben- 
tures, article  199  of  the  commercial  code 
is  not  applicable. 

Art.  15.  The  interest  on  the  debentures 
of  the  Nippon  Kogyo  Ginko  shall  be  paid 
twice  in  a year  or  oftener,  and  the  prin- 
cipal shall  be  redeemed  by  lot  within  the 
space  of  thirty  years  reckoned  from  the 
date  of  issue. 

Art.  16.  In  case  the  Nippon  Kogyo  Ginko 
desires  to  issue  debentures  at  a lower  rate 
of  interest,  in  order  to  replace  those  al- 
ready issued,  the  bank  need  not  be  bound 
by  the  limitations  of  article  12. 

When  new  debentures  at  a lower  rate  of 
interest  are  issued  as  here  indicated,  the 
bank,  within  the  space  of  three  months 
after  their  issue,  shall  redeem  by  lot  old 
debentures  equal  in  face  value  to  the 
amount  of  the  new  debentures. 

CHAPTER  V. 

The  Reserve  Fund. 

Art.  17.  The  Nippon  Kogyo  Ginko  shall 
put  aside,  at  the  end  of  each  business  year, 
eight  per  cent,  or  more  of  its  net  profit 
as  a reserve  for  making  up  any  deficit  in 
its  capital,  and  two  per  cent,  or  more  of 
the  said  net  profit  for  maintaining  an  even 
rate  of  dividends. 

CHAPTER  VI. 

Government  Control  and  Subsidy. 

Art.  18.  The  Government  shall  have  con- 
trol over  the  business  of  the  Nippon  Kogyo 
Ginko. 


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Art.  19.  The  Nippon  Kogyo  Ginko,  when 
it  proposes  to  make  alterations  in  its  by- 
laws, shall  obtain  the  permission  of  the 
Minister  of  State  for  Finance. 

Art.  20.  The  Nippon  Kogyo  Ginko, 
when  it  proposes  to  open  branch  offices  or 
agencies,  shall  obtain  the  permission  of  the 
Minister  of  State  for  Finance. 

Art.  21.  The  Nippon  Kogyo  Ginko,  when 
it  proposes  to  declare  a dividend,  shall  ob- 
tain the  permission  of  the  Minister  of  State 
for  Finance. 

Art.  22.  The  Minister  of  State  for  Fi- 
nance may  suspend  any  act  of  /the  Nippon 
Kogyo  Ginko  in  the  course  of  its  business 
management,  should  such  act  be  regarded 
by  him  as  either  contrary  to  laws,  ordi- 
nances, or  by-laws,  or  injurious  to  the  pub- 
lic interest. 

Art.  23.  The  Nippon  Kogyo  Ginko,  in 
accordance  with  orders  from  the  Minister 
of  State  for  Finance,  shall  present  reports 
showing  the  condition  of  its  business  to- 
gether with  its  financial  accounts. 

Art.  24.  The  Minister  of  State  for  Fi- 
nance shall  specially  appoint  comptrollers 
to  supervise  the  business  management  of  the 
Nippon  Kogyo  Ginko. 

Art.  25.  The  comptrollers  of  the  Nippon 
Kogyo  Ginko  may  examine  at  any  time 
the  vault  for  cash,  the  vault  for  instru- 
ments of  credit,  the  books  and  all  kinds  of 
documents  of  the  Nippon  Kogyo  Ginko. 

The  comptrollers  of  the  Nippon  Kogyo 
Ginko  may  attend  the  general  meeting  of 
shareholders  or  any  other  meetings  of  the 
bank,  and  may  express  their  views  at  the 
same. 

Art.  26.  If  the  dividend  to  be  declared 
for  any  business  year  of  the  Nippon  Kogyo 
Ginko  does  not  amount  to  five  per  cent, 
per  annum  of  the  paid-up  capital,  the 
Government  shall  give  a subsidy  sufficient 
to  make  up  the  deficiency,  provided  that 
the  period  of  the  Government’s  liability 
under  this  article  shall  be  limited  to  five 
years  reckoned  from  the  last  day  of  the 
first  business  year  of  the  bank;  and  pro- 
vided further  that  the  amount  of  said  sub- 
sidy shall  in  no  case  exceed  five  per  cent, 
of  the  paid-up  capital. 

CHAPTER  VII. 

Punitive  Regulations. 

Art.  27.  Should  there  occur  a breach 
of  law  or  regulation,  as  enumerated  below, 
in  the  business  management  of  the  Nippon 
Kogyo  Ginko,  the  president,  vice-president 
and  directors  shall  be  required  to  pay  a fine 
of  not  less  than  one  hundred  yen  and  not 
more  than  one  thousand  yen;  provided  that 
if  any  of  the  above  mentioned  officers  has 
not  been  a party  to  in  the  violation,  such 
officer  shall  be  exempted. 

1.  If  the  bank  has  not  secured  the  sanc- 


tion of  the  Minister  of  State  for  Fi- 
nance in  a case  respecting  which  it 
is  provided  in  this  law  that  such 
sanction  should  be  secured. 

2.  If  the  bank  has  undertaken  any  busi- 
ness not  mentioned  in  this  law,  con- 
trary to  the  provisions  of  article  11. 

3.  If  the  bank  has  issued  debentures 
contrary  to  the  provisions  of  article 
12  and  article  16. 

Art.  28.  If  the  president,  vice-president 
and  directors  of  the  Nippon  Kogyo  Ginko 
act  in  contravention  of  the  provisions  of 
article  8,  they  shall  be  individually  required 
to  pay  a fine  of  not  less  than  twenty  yen 
and  not  more  than  two  hundred  yen. 

APPENDIX. 

Art.  29.  The  Government  shall  appoint 
a commission  for  the  transaction  of  all 
business  connected  with  the  establishment 
of  the  Nippon  Kogyo  Ginko. 

Art.  30.  The  commission  for  the  estab- 
lishment of  the  Nippon  Kogyo  Ginko  shall 
make  a draft  of  the  by-laws,  shall  secure 
the  sanction  of  the  Government  for  the 
same,  and  shall  then  invite  subscriptions. 

Art.  31.  When  the  said  commission  has 
secured  a sufficient  number  of  subscribers, 
it  shall  present  to  the  Government  the  sub- 
scription certificates  and  solicit  sanction 
for  the  establishment  of  the  bank. 

When  the  said  sanction  has  been  secured, 
the  commission  shall  without  delay  call  for 
the  payment  of  the  first  installment  of 
capital  by  the  subscribers. 

Art.  32.  At  the  conclusion  of  the  general 
meeting  of  shareholders  for  the  establish- 
ment of  the  bank,  the  commission  for  the 
establishment  of  the  Nippon  Kogyo  Ginko 
shall  hand  over  its  business  to  the  president 
of  the  bank. 

This  law  shall  become  effective  from  the 
day  of  promulgation. 

The  Nippon  Kogyo  Ginko  shall  take  the 
following  steps  within  three  months  from 
the  day  on  which  this  law  becomes  effective. 

1.  Shares  which  are  one  hundred  thous- 
and in  number  at  the  time  when  the 
law  becomes  effective,  shall  be  altered 
to  two  hundred  thousand  shares,  one- 
half  being  fully  paid  up  and  the 
other  half  being  not  fully  paid  up. 
The  latter  half  shall  be  allotted  in 
proportion  to  the  number  of  the 
shares  owned  by  shareholders  at  the 
time  when  the  law  becomes  effective. 

2.  A call  of  not  less  than  one-quarter 
of  the  amount  shall  be  made  with- 
out delay  for  the  aforesaid  not  fully 
paid  up  shares.  In  this  case,  the  pro- 
visions of  the  commercial  code  relat- 
ing to  the  increase  of  the  capital  of 
a joint  stock  company  shall  be  ap- 
plied. 


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3.  There  shall  be  an  increase  of  one 
hundred  and  fifty  thousand  shares, 
and  a call  for  their  full  payment 
shall  be  made  without  delay.  In  this 
case,  paragraph  2 of  article  217  and 
paragraph  1 of  article  218  of  the 
commercial  code  need  not  be  ob- 
served. 

4.  Necessary  registrations  in  connection 
with  the  aforesaid  three  clauses  shall 


III.  Tiie  Establishment  of  the  In- 
dustrial Bank  of  Japan. 

Since  the  promulgation  of  the  law 
concerning  the  Industrial  Bank  of 
Japan,  the  Government  has  devoted 
itself  to  the  successful  execution  of 
the  scheme,  and  on  March  31,  1900. 


MOTOSHI  KATO 
Secretary  Industrial  Bank  of  Japan. 


be  made  within  two  weeks  from  the 
day  of  the  closure  of  the  share- 
holders’ general  meeting  held  in  con- 
nection with  the  second  and  third 
clauses  in  accordance  with  Article 
213  of  the  commercial  code.  In  this 
case,  the  document  which  certifies 
the  taking  over  of  shares,  may  be 
used  in  place  of  the  documents  pro- 
vided in  clauses  1 and  2 of  article  180 
of  the  law  of  procedure  in  non- 
contentious  matters. 


the  following  twenty-three  persons 
were  appointed  the  committee: 

Inajiro  Tajiri,  the  Vice-Minister  of 
Finance;  Shiro  Fujita,  the  Vice-Min- 
ister of  Agriculture  and  Commerce; 
Shinztn  Matsuo,  the  Chief  of  the  Ac- 
count Bureau  of  the  Treasury  Depart- 
ment; Jun  Saito,  the  Secretary  of  the 
Financial  Department;  Messrs.  S.  Hot- 


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ta,  M.  Takei,  E.  Shibusawa,  R.  Kuri- 
hara,  It.  Hara,  K.  Sonoda,  K.  Taka- 
hashi,  K.  Okura,  Z.  Yasuda,  B.  Naka- 
no,  I.  Matsumoto,  G.  Tanaka,  K.  Ono. 
N.  Horibe,  R.  Toy  oka  wa,  S.  Okay  a. 
and  G.  Okahashi. 

On  June  12,  1901,  Mr.  I.  Tajiri  was 
appointed  on  the  committee  following 
Mr.  Y.  Sakatani  of  the  Treasury  De- 
partment, Mr.  T.  Yasuhiro  of  the  De- 
partment of  Agriculture  and  Com- 
merce (July  23)  and  Mr.  J.  Sovcda 
(November  2/5)  were  respectively  ap- 
pointed on  the  committee.  The  meet- 
ing of  the  committee  was  held  at  the 
upper  chamber  of  the  Finance  Depart- 
ment cn  September  24  and  26,  1900. 
but  the  circumstances  then  prevailing 
did  not  permit  the  raising  of  shares  so 
that  the  decision  was  made  concerning 
the  articles  of  the  bank.  On  December 

4,  1900,  the  third  meeting  of  the  com- 
mittee was  held  in  which  the  modus 
o per  and i and  time  for  raising  shares 
were  discussed,  and  on  April  11  an 
office  was  opened  on  the  second  floor 
of  the  Treasury  Department,  and  Mr. 
J.  Soveda,  the  Chairman  of  the  com- 

-mittee,  was  engaged  most  ardently  in 
the  discharge  of  his  duties.  Notwith- 
standing various  unfavorable  circum- 
stances for  the  raising  of  shares,  every- 
thing w’ent  off  most  satisfactorily,  and 
the  shares  were  over-subscribed  three 
times.  On  March  27,  1902,  a general 
meeting  was  held  in  the  building  of  the 
Bankers*  Association,  in  which  they 
discussed  particulars  concerning  the 
expenses  for  the  establishment  of  the 
bank,  and  allowances  to  the  president, 
directors  and  auditors.  The  election 
of  directors  and  auditors  was  made  with 
the  following  result: 

As  candidates  for  directors:  O.  To- 
mono,  T.  Inouye,  N.  Kaneko,  J.  Saito, 

5.  Asano,  H.  Mogami  and  J.  Watanabe. 
As  auditors:  E.  Shibusawra,  Z.  Yasuda 
and  K.  Okura. 

On  the  same  day  the  appointment  of 
Mr.  J.  Soyeda  to  the  presidency,  and 
Messrs.  O.  Tomono,  T.  Inouye,  N.  Ka- 
nako  and  J.  Saito  to  the  directorship 
was  made,  and  their  terms  of  office  ex- 
tended for  two  periods. 


IV.  Tiie  Revision  of  Laws  of  the 
Bank. 

During  the  year  1905,  with  the  news 
of  repeated  successes  achieved  by 
Japan  in  the  war,  the  uprising  of  in- 
dustrial and  economic  enterprises  was 
generally  expected  and  the  need  of 
monetary  organs  was  keenly  felt.  At 
this  juncture,  in  March,  1905,  the  laws 
of  the  Industrial  Bank  of  Japan  were 
revised  as  follows: 

1.  In  art.  IX,  the  sphere  of  the 
bank’s  business  was  enlarged.  Up  to 
the  present,  the  security  business  of 
the  bank  was  confined  to  the  treatment 
of  local  loan  bonds,  and  stocks  and  de- 
bentures of  companies,  but  this  limita- 
tion under  the  new  laws  was  done  away 
with. 

It  was  so  arranged  under  the  new 
system  that  the  discount  of  check  will 
be  made  on  the  securities  of  national 
loan  bonds,  local  loan  bonds,  stocks 
and  debentures  of  companies.  Also  an 
enactment  was  passed  enabling  the 
bank  to  make  advances  on  the  security 
of  financial  corporations  settled  by  the 
regulations.  Thus  the  railway  cor- 
porations formed  under  the  railway 
mortgage  law,  and  the  mining  corpo- 
rations formed  under  the  mining  mort- 
gage law  and  the  factory  corporations 
under  the  factory  mortgage  law. 

2.  Under  art.  XI,  while  prohibiting 
the  bank  from  any  other  undertakings, 
the  following  postscripts  were  added, 
making  provision  for  the  business  of 
the  bank  to  be  discharged  in  foreign 
countries  with  the  consent  of  the  Min- 
ister of  Finance.  Thus  business  which 
does  not  come  under  the  heading  of 
art.  IX,  could  be  performed  in  foreign 
countries  provided  it  is  the  business  of 
bankers. 

3.  The  capacity  to  issue  debentures 
was  so  far  five  times  the  capital  which 
was  changed  to  ten  times. 

4.  Under  the  art.  XII,  the  Indus- 
trial Bank  of  Japan  may  issue  de- 
bentures to  ten  times  the  capital,  and 
within  limit  not  exceeding  the  present 
amount  of  advances,  the  amount  of  na- 
tional loan  bonds,  local  loan  bonds  and 


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the  amount  of  debentures  of  companies 
on  hand,  but  adequate  provisions  are 
not  yet  made  to  meet  the  demand  re- 
quired for  extensive  enterprises.  Un- 
der the  circumstances,  a provision  was 
made  under  art.  XII  (second  clause), 
to  the  effect  that  in  case  capital  is  need- 
ed for  enterprises  of  public  benefit  to 
be  carried  on  in  foreign  countries,  the 
bank  may  issue  debentures  without 
having  recourse  to  the  provisions  made 
in  arts.  XII  and  XV  and  also  in  art. 
CC  of  the  commercial  code,  but  the  so- 
called  enterprises  of  public  nature  will 
be  ordained  by  Imperial  Decree  at  the 
time. 

By  the  revision  of  the  laws  above 
mentioned,  the  Industrial  Bank  of 
Japan  has  extended  its  sphere  of  busi- 
ness, but  in  view  of  the  fact  that  it  is 
not  enough  to  perfect  the  common  use 
of  both  foreign  and  domestic  funds  by 
making  connections  with  monetary 
markets  abroad,  the  authorities  con- 
cerned tried  to  make  foreign  capitalists 
shareholders  of  the  Industrial  Bank  of 
Japan.  In  planning  for  an  increase  of 
capital,  they  asked  the  Government  for 
the  revision  of  the  banking  law.  The 
Government  accepted  their  offer,  and 
formed  the  revised  law  which  was  ap- 
proved by  the  Diet,  and  thus  a second 
revision  of  the  banking  lawr  was  ef- 
fected. By  this  revision  the  capital 
of  10,000,000  yen  has  been  increased 
to  17,500,000  yen,  of  which  $7,500,000 
yen  is  for  foreign  capitalists,  and  the 
bank  issued  shares  to  the  bearer  which 
were  accepted  by  influential  capitalists 
of  England,  America,  Germany  and 
France. 

V.  The  Establishment  of  the; 

Branch  Office. 

After  the  war  with  Russia,  both  our 
people  and  officials  rendered  good  ser- 
vice in  the  development  of  Korea.  In 
order  to  accomplish  this  great  mission 
for  Japan,  we  must  have  a monetary 
organ  in  Korea.  In  April  of  1906,  a 
business  office  was  established  in  Seoul 
for  the  observation  of  the  condition  of 
the  peninsula.  On  October  25,  of  the 
same  year,  a branch  was  established  in 


Seoul,  and  on  March  16,  1907,  the 
Seoul  branch  came  into  existence. 

VI.  The  Monetary  Relation  Be- 
tween i he  Bank  and  Foreign 
Markets. 

During  the  first  year  that  the  In- 
dustrial Bank  of  Japan  came  into  ex- 
istence, it  imported  foreign  capital  as 
one  of  its  chief  matters  of  business.  It 
undertook  the  resale  of  Government 
bonds  amounting  to  50,000,000  yen. 
The  bank  opened  negotiations  with  the 
Government  from  June,  1902,  and  on 
September  30,  of  the  same  year,  the 
bank  offered  to  accept  bonds  amounting 
to  50,000,000  yen  at  five  per  cent,  in- 
terest, and  at  the  same  time,  it  intro- 
duced to  the  Government  the  bill  of 
contract  for  sale  of  bonds  to  the  banks 
in  Hcngkong  and  Shanghai.  Getting 
permission  from  the  Government  on 
the  same  day,  the  bank  made  a con- 
tract for  sale  of  bonds  with  the  foreign 
banks  above  referred  to.  The  terms 
the  Government  promised  to  the  bank 
in  connection  with  the  sale  of  bonds  is 
that  the  endorsed  bonds  amounting  to 
50,000,000  yen  with  five  per  cent,  in- 
terest shall  be  sold  at  £98  per  1,000 
yen,  and  that  money  is  to  be  handed 
over  to  tlie  Government  in  London  in 
exchange  for  bonds.  The  sale  of  the 
bonds  went  off*  well  and  the  transac- 
tion was  completed  in  February,  1903. 
Meanwhile  the  Russo-Japanese  war 
broke  out,  and  mercantile  business  was 
very  dull. 

In  the  spring  of  1905,  when  the  war 
closed,  bringing  victory  to  Japan,  the 
uprising  of  new  undertakings,  and  the 
extension  of  old  undertakings  absorbed 
funds  to  such  an  extent  that  the  neces- 
sity for  the  common  use  of  foreign  and 
domestic  capital  was  keenly  felt. 
Hereupon  the  Industrial  Bank  of 
Japan  had  to  turn  its  attention  to 
the  trust  business.  It  accepted 
the  trust  of  the  debentures  of  the 
Tanko  Railway  Company  in  the  Hok- 
kaido. amounting  to  £1,000,000.  It 
also  took  over  the  Tokyo  Municipal 
Loan  Bonds,  and  the  South  Man- 
churian Railway  Company's  debent- 


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THE  BANKERS  MAGAZINE. 


ures,  and  issued  them  in  London.  The 
chief  points  concerning  the  bonds  and 
debentures  above  referred  to  are  as 
follows: 

Date  of  Issue 


Description.  and  Sale. 

5%  Public  Loan  Bonds Oct.,  1902 

Tokyo  City  Loan  Bonds July,  1906 


South  Manchurian  Railway  Loan  July,  1907 

The  amount  of  funds  the  Industrial 
Bank  of  Japan  invested  abroad  was 
5,000,000  yen  for  the  Korean  Govern- 
ment (March,  1906),  390,000  yen  for 
the  Japanese  Settlers*  Association  at 
Fusan  (April,  1907),  and  about  7,500,- 
000  yen  for  both  public  and  private 
corporations  in  China.  In  conclusion 
let  us  state  the  monetary  condition  of 
the  bank  at  home.  Since  its  establish- 
ment, it  has  issued  bonds  for  business 
purposes  amounting  to  17,350,000  yen, 
which  were  invested  in  sound  enter- 
prises. 

In  the  summer  of  1 906  the  bank 
made  a plan  for  the  liquidation  of  local 
loans.  Therefore  since  November  of 
the  same  year  it  has  accepted  local 
loans  amounting  to  3,000,000  yen. 

Other  trust  business  done  by  the  In- 


dustrial Bank  of  Japan  are  those  of 
Fuji  Cotton  Spinning  Company 
amounting  to  2,000,000  yen,  Japan 
Sugar  Refining  Company  and  Osaka 

Total  Amount  Pro-  Rate  of 

Issued.  Face  Value,  ceeds.  Interest. 
50,000,000  yen  £102.01,08  98.00  5 per  cent. 

£1,500,000  £100,00,00  96.10 

£4,000,000  £100,00.00  97.00 

Cotton  Spinning  Company,  amounting 
to  1,000,000  yen  respectively.  The 
business  of  the  bank  at  its  first  period 
was  1,169,000  yen  invested  for  vari- 
ous undertakings,  and  over  896,000  yen 
for  national  loans.  But  as  time  went 
on  its  business  has  gradually  been  ex- 
tended, and  at  the  latest  report,  the 
amount  of  the  investment  is  laid  down 
at  over  26,000,000  yen  for  national 
and  local  loans,  over  30,860,000  yen 
for  debentures,  over  11,550,000  yen 
for  various  undertakings,  over  1,820,- 
000  yen  for  gold  and  silver  mines,  and 
4,890,000  yen  for  Korea,  making  a 
total  of  48,140,000  yen,  showing  an 
increase  of  over  46,070,000  yen  com- 
pared with  that  of  the  investment  made 
at  the  end  of  the  first  period. 


SILVER  COIN  BY  REGISTERED 
MAIL. 

IT  seems  probable  that  the  Government 
will  save  $30,000  this  coming  year  in 
the  shipment  of  silver  coin.  Usually 
this  coin,  is  sent  by  express  but  the  new 
law  provides  that  half  of  the  appropria- 
tion— $60,000 — shall  be  used  in  sending  this 
money  by  registered  mail  and  the  Treas- 
ury people  hold  that  $30,000  shall  be  spent 
first  on  the  registered  mail.  It  seems  likely 
that  all  the  coin  can  be  shipped  in  this 
way  for  a total  cost  of  $30,000  in  which 
case  it  would  not  be  necessary  to  send  any 
by  the  express  companies. 


BANKS  IN  CHILE. 

IN  the  Republic  of  Chile  on  December  31, 
1907,  there  were  in  operation  24  banks 
with  paid-up  capital  of  124,040,525.63 
pesos  (a  peso  equals  36  1-2  cents),  and  ag- 
gregate resources  of  811363,263.17,  as 
shown  by  the  balance  sheet  of  the  banks 
published  in  the  February  22  edition  of  La 


Revista  Comercial  of  Valparaiso,  Chile.  The 
most  important  of  the  banks  is  the  Bank 
of  Chile,  the  subscribed  capital  of  which 
is  30,000,000  pesos. 

A summary  of  the  returns  is  submitted 


herewith : 

ASSETS. 

Pesos. 

Cash  on  hand  88.745.808.07 

Bonds  and  securities  14.823,250.82 

Real  estate  and  other  property  10.773.369.84 

Agencies  17,661.641.06 

Bonds  and  documents  in  cus- 
tody and  In  security  194.795,990.55 

Advances  47S. 548. 846.71 

Other  accounts  6,014.356.12 


Total  811,363,263.17 

LIABILITIES. 

Paid-up  capital  124.040.525.63 

Reserve  and  guaranty  funds  . . 25.765.952.50 

Profit  & loss  6.530,668.63 

Funds  for  savings,  withdrawals, 

and  dividends  3.491.322.19 

Funds  for  Incidentals  1,236.468.85 

Dividends  unpaid  278.362.76 

Deposits  415,205.924.06 

Ponds  and  documents  deposited  194.795.990.55 

Pending  transactions  5.191.211.94 

Other  accounts  34.S26.836.06 


Total  811,363,263.17 


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SAVINGS  BANKS 


THE  PASSING  OF  THE  DEPOSIT  LEDGER. 


By  Wm.  H.  Kniffin,  Jr. 


January  1st,  1908,  the  one  hun- 
dred  and  thirty-eight  savings 
banks  of  New  York  state  had  2,731,- 
447  open  accounts  on  their  books. 
They  open  over  half  a million  new  ac- 
counts each  year,  and  the  transactions 
with  their  depositors  aggregate  over 
seven  and  one-half  million  items.  One 
bank  alone  had  340,346  deposits  and 
drafts  in  one  year. 

To  handle  this  vast  volume  of  busi- 
ness necessitates  a host  of  employes;  it 
consumes  barrels  of  ink,  and  demands 
infinite  patience  and  attention  to  detail. 
When  it  is  remembered  that  most  of 
these  good  institutions  keep  their  books 
in  perfect  balance,  it  will  not  require 
long  study  to  become  convinced  that 
herein,  system  and  accuracy  have  been 
highly  developed.  The  greater  part  of 
the  transactions  referred  to  above,  oc- 
cur at  the  interest  periods,  when  the 
rush  is  on  and  the  vast  multitudes  are 
depositing  and  withdrawing,  having  in- 
terest credited,  etc.,  and  whatever  the 
system,  it  must  be  expansive,  capable 
of  handling  the  rush,  yet  not  too  costly 
and  cumbersome  to  be  serviceable  in 
normal  times.  It  behooves  the  bank 
man  therefore,  to  find  the  easiest,  the 
quickest,  the  most  accurate,  and  the 
most  elastic  system  available,  if  he 
would  keep  pace  with  the  times  and  the 
demands  of  his  business. 

The  Ojd  Idea  and  the  New. 

Accounting  is  a fine  art,  exceedingly 
simple  in  its  fundamental  principles, 
vet  often  intricate  and  complex  in  its 
operations.  It  is  simply  a matter  of 
debit  and  credit,  asset  and  liability;  ad- 


dition, subtraction  and  division.  But 
what  is  an  asset,  and  what  a liability? 
Twice  tw'o  makes  four — but  we  some- 
times get  it  five,  or — three,  and  he  who 
never  made  an  error  was  never  born. 

The  old  time  notion  of  bookkeeping 
was  to  make  it  complex;  to  multiply  the 
number  of  transcriptions  and  thus  les- 
sen the  liability  to  err.  Consequently, 
the  journal,  with  the  post  and  cross- 
post  idea,  doing  the  same  thing  several 
times  just  to  be  sure  to  get  it  right — 
and  multiplying  the  chances  of  getting 
it  wrong!  But  the  new  idea  is  sim- 
plicity. Do  the  thing  once,  but  do  it 
right  that  once,  and  make  this  entry 
cover  as  many  purposes  as  possible — a 
logical  and  sensible  conclusion.  Tran- 
scribe as  little  as  possible.  Hence 
the  carbon  system,  the  billing  machines 
and  direct  posting,  w'ith  the  card  and 
loose  leaf  systems  as  auxiliaries,  to  sim- 
plify the  process,  eliminating  and 
promptly  and  properly  burying  the 
dead  matter  as  fast  as  its  usefulness  is 
ended. 


Bookkeeping  in  the  Past. 


From  the  deposit  ledger  with  thou- 
sands of  accounts  (many  dead)  to  the 
card  tray  or  the  loose  leaf  binder,  is  a 
long  step.  In  an  able  address  delivered 
before  Ihe  American  Bankers’  Associa- 
tion, Col.  Sprague,  President  of  the 
Union  Dime  Savings  Institution  of 
New  York,  traced  the  evolution  of  the 
aforesaid  ledger  from  the  time  of  the 
bound  book  with  five  thousand  accounts, 
to  the  advent  of  the  latter  day  systems. 
He  told  of  the  time  when  each  debit 
had  “To  cash”  and  each  credit  “By 

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THE  BANKERS  MAGAZINE. 


cash” — otherwise,  how  could  you  tell 
what  it  was?  This  was  subsequently 
abbreviated  to  “T”  and  “B,”  represent- 
ing, as  the  janitor  put  it,  “what  they 
bought  and  what  they  took.”  The  time 
came,  however,  when  simply  the  date 
and  the  amount — in  the  proper  place, 
of  course,  told  the  whole  story. 

The  old  time  practice,  still  in  vogue 
in  many  places,  was  to  make  the  de- 
posit ticket,  transcribe  at  the  end  of 
the  day  to  the  journal — cash,  the  big- 
ger the  book  the  better,  and  post  from 
thence  to  the  ledgers,  and  cheek  back. 
This,  as  the  Colonel  humorously  re- 
marks, was  “book”-kceping,  but  to  post 


perforated  sheets,  detaching  the  per- 
forations, leaving  the  name  and  num- 
ber only.  These  are  filled  in  as  ap- 
pear on  the  ledger  and  must  tally  with 
the  main  sheet.  Many  and  varied  are 
the  systems  devised  to  meet  the  needs, 
representative  forms  of  which  will  be 
shown  in  a succeeding  paper,  but  what- 
ever the  method  of  posting  and  check- 
ing and  proving,  one  fact  remains,  the 
accounts  fill  up. 

The  Baxk  Max's  Problem. 

The  savings  bank  account  is  peculiar. 
One  can  never  tell  w’hen  Sarah  Brown 
opens  account  with  you,  whether  her 

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direct  from  the  slips  and  dispense  with 
the  journal — that  was  unsafe  and  un- 
sound. The  ledger  was  ruled  for  debit 
and  credit,  a column  for  each,  and  the 
balance  brought  down  at  intervals  or 
carried  in  lead  pencil. 

It  is  not  so  many  years  since  these 
notions  were  current,  but  these  later 
days  have  seen  many  excellent  substi- 
tutes. Some  banks  post  direct  from  the 
credit  and  debit  slips,  and  check  from 
the  teller’s  sheets,  doing  away  with  the 
journal  altogether.  Others  enter  the 
new  and  old  balances  on  sheets  ruled 
for  the  purpose,  and  strike  the  differ- 
ence, which  must  tally  with  the  total 
deposits  or  drafts.  Others  post  from 


ladyship  will  be  a weekly  visitor,  or 
never  show  up  at  all.  Many,  perhaps 
most  of  the  savings  accounts  are  quasi- 
dormant,  increasing  only  with  the  peri- 
odical additions  of  interest.  The  busi- 
ness account  is  presumed  to  be  active 
from  the  beginning.  The  Standard  Oil 
account  would  certainly  be  a daily  visit- 
or and  due  preparation  made  to  handle 
it,  while  the  corner  groccryman’s  would 
be  more  or  less  inactive.  In  the  savings 
institution,  only  time  will  tell  who  will 
be  the  “steady’s.”  In  a certain  metro- 
politan savings  bank,  one  account, — 
that  of  a trolley  car  conductor  has  had 
over  one  hundred  entries  during  the 
past  year.  Upon  opening  the  account, 


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he  stated,  when  asked  his  occupation, 
that  “he  was  a nickel  knocker,”  mean- 
ing he  “helped  himself.”  During  the 
summer  he  deposited  daily.  A perusal 
of  this  account  would  indicate  the  Mon- 
days without  the  aid  of  a calendar,  for 
these  were  the  largest  deposits.  After 
a “good”  Sunday,  he  would  have  from 
$15.00  to  $25.00  as  his  share  of  the 
“earnings”  of  his  car,  and  it  speedily 
fount!  its  way  into  the  bank.  He  lost 
his  place  in  consequence  of  such  prac- 
tices and  had  to  fall  back  upon  his 
“savings.”  Obtaining  a new  position 
with  another  company,  he  repeated  the 
old  tricks,  and  again  was  laid  off.  The 
highest  balance  was  $203.50,  and  the 
lowest  $30.00, — not  a profitable  ac- 
count. 

As  a lesson  in  activity,  and  as  a study 
in  the  “traits  and  tendencies  of  trolley 
car  conductors”  it  is  interesting.  If 
this  man  is  a type,  and  his  brethren 
purloin  likewise,  it  is  no  wonder  the 
companies  go  bankrupt.  But  then, — 
this  is  only  supposition.  It  is  no  part 
of  the  bank  man's  duties  to  ask  “where 
he  got  it”, — perhaps  he  had  another 
source  of  income. 

This  uncertainty  has  brought  about 
the  passing  of  the  bound  ledger  and 
its  more  elastic  substitute  in  the  form 
of  card  or  loose  leaf  has  come  into  be- 
ing to  meet  this  very  need.  Under  the 
regime  of  the  bound  ledger,  one  of  the 
problems  of  the  savings  bank  is,  how 
to  provide  space  enough  for  the  active 
and  not  too  much  for  the  passive. 
Many  and  cumbersome  have  been  the 
methods  devised  to  obviate  the  diffi- 
culty, the  most  prevalent  seems  to  have 
been  this:  when  an  account  is  full,  the 

balance  is  carried  to  the  nearest  open 
space.  No  more  undesirable  method 
could  have  been  found.  It  takes  the 
accounts  out  of  all  sequence,  and  its 
only  redeeming  feature  is  the  saving 
of  white  paper.  To  quote  the  Colonel 
again:  “After  finding  the  place  of  an 

account,  perhaps  tracing  its  course 
through  several  unfilled  spaces  to  which 
it  had  been  carried,  the  eye  and  the 
finger  had  to  recur  to  the  deposit  book 
or  draft  book  to  make  sure  of  the  num- 


ber and  name,  then  back  to  the  account, 
carrying  the  amount  as  a precious  bur- 
den, sometimes  spilling  it  on  the  way, 
and  usually  making  the  voyage  across 
the  expanse  of  those  two  big  books  two 
or  three  times  till  it  finally  reached 
the  haven  where  it  should  be.  Many 
accounts  overflowed  the  boundaries  of 
the  original  spaces  allotted  to  them  and 
had  thus  to  be  carried  to  the  unused 
portion  of  the  territory  of  some  short- 
lived depositor  nearby,  and  so  on,  until 
the  complication  became  inextricable 
and  fruitful  in  posting  to  the  wrong 
account.  Finally  this  became  intol era- 


309 


Card  Ledger  Account,  ruled  for  48  entries.  Note 
the  divisional  indicators. 


ble  and  the  space  so  exhausted  that  all 
surviving  accounts  had  to  be  carried  to 
a nice  big  new  book.  This  was  one  of 
the  most  irksome  of  jobs  and  nobody 
wanted  it.” 

Another  method,  with  a bit  more  of 
merit  attached,  is  to  insert  blank  leaves 
at  intervals,  to  which  the  “filled”  ac- 
counts are  carried.  Another,  to  leave 
marginal  blanks,  answering  the  same 
purpose;  and  still  another,  to  carry  a 
number  of  blank  accounts  in  the  back 
of  each  ledger  for  such  purposes.  But 
neither  of  these  methods  abolish  the 
inevitable,  they  merely  postpone  it,  and 
to  a new  ledger  the  accounts  must  go, 


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THE  BANKERS  MAGAZINE. 


Loose  Leaf  Ledger  closed.  Made  in  any  size,  with  key  as  shown  or  Yale  lock.  By  courtesy  of 
Dennison  & Sons.  4-10  Liberty  Street,  New  York. 


necessitating  the  closing  of  the  old, 
opening  of  the  new;  indexing,  filing, 
etc.,  and  is  a nuisance  at  best. 

Contrast  a thousand  accounts,  scat- 
tered thus,  out  of  all  regular  order, 
transferred  and  re-transferred  again, 
with  a drawer  of  cards,  every  one  alone, 
alive  and  alert,  or  a loose  leaf  ledger, 
likewise,  each  account  carrying  the 
same  number  as  long  as  the  account 
shall  live — verily  it  is  worth  while ! A 
year’s  experience  under  both  systems, 
and  no  other  argument  will  be  neces- 
sary. 

Cards  and  Loose  Leaves. 

Many  a bank  man  is  wedded  to  his 
own,  and  parts  with  it  only  under  dire 
necessity,  but  to  convince  him  of  the 
merits  of  the  new,  oftimes  needs  a 
philosopher  with  gifted  tongue.  As  to 
their  convenience,  he  needs  no  proof, 
but  as  to  their  safety — that  is  another 
matter.  From  a somewhat  extensive 
canvass  of  this  subject  made  by  the 


writer,  the  following  objections  seem 
to  be  common  in  this  regard,  viz.:  their 
safety,  their  legality,  and  their  bulk. 
While  it  was  expected  that  the  legal 
side  would  be  most  prominent,  this 
seems  to  have  been  accepted  as  settled. 
The  possibility  of  loss  or  manipulation 
is  pertinent,  and  between  the  cards  and 
the  loose  leaf,  with  this  in  mind,  there 
is  not  much  choice.  The  bulk  is  a mat- 
ter of  desk  room. 

The  fundamental  differences  be- 
tween the  two  methods  are  nil,  merely 
that  the  one  is  in  sheets,  bound  like  a 
book,  under  lock  and  key,  if  you  will, 
while  the  other  is  in  drawers,  locked 
also,  if  desired.  To  choose  the  better, 
is  a matter  of  taste.  One  looks  like  a 
book — the  other  doesn’t,  that’s  all. 
They  both  have  their  good  points,  and 
both  have  their  weaknesses.  Neither 
has  reached  perfection.  However  this 
may  be,  it  is  a matter  of  wonder  that 
so  many  banks  have  failed  to  discover 


Loose  Leaf  Ledger  showing  flat  opening. 


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SAVINGS  BANKS. 


the  great  worth  of  the  card  system  of 
indexing.  Many,  if  not  all  savings 
banks  work  under  name  and  number. 
Without  the  number,  the  bank  man  is 
helpless.  John  Williams  comes  in  and 
reports  his  liook  lost.  “What’s  your 
number?”  you  ask.  He  doesn’t  know, 
and  you  must  find  it — sometimes  quick- 
ly. To  turn  to  the  old  time  vowel  in- 
dex and  hunt  through  a mass  of  dead 
matter,  is  neither  necessary  nor  desira- 
ble. His  account  should  not  be  one 
of  two  hurdred,  but  one  of  twenty,  one 
of  ten.  Herein  comes  the  card  index, 


20a 

may  be  found  who  takes  both  asset  and 
liability — strange,  yet  true.  Suppose 
Mr.  Thief  takes  $100  from  the  cash 
and  a corresponding  amount  from 
the  book  liabilities — how  about  it?  One 
bank  lost  over  a quarter  of  a million 
taken  thus  from  deposit  accounts,  the 
trial  balances  being  altered  to  match. 
On  its  face,  the  bank  was  none  the 
Morse,  but  when  the  pass  books  were 
called  in  and  totaled,  they  owed  a quar- 
ter million  more  than  they  owned,  and 
twro  men  died  in  Dannemora  Prison, 
peeling  potatoes,  in  consequence. 


An  original  idea  in  Loose  Leaf  Ledger.  Note  the  division  of  the  book  into  two  sections.  The 
accounts  are  grouped,  first  by  hundreds  and  then  by  fifty's.  By  using  a thin,  tough 
paper,  this  binder  will  hold  from  2.090  to  2,500  accounts.  A year's  test  of  this 
book  has  given  perfect  satisfaction.  On  account  of  the  slanting 
position,  to  show  the  division,  the  flat  opening 
feature  does  not  appear. 


dividing  and  sub-dividing  the  Will- 
iamses until  it  gets  to  be  a nicety,  and 
you  find  it  instanter.  For  due  dates 
of  interest  payments,  expiration  of  in- 
surance, etc.,  it  is  a gold  mine.  Every 
day  has  its  allotment  and  for  such  rec- 
ords, it  is  without  a peer.  But  we  are 
digressing,  and  back  to  the  ledger. 

As  to  security — and  this  must  be  con- 
sidered, for  as  long  as  men  are  human, 
some  will  steal  and  others  try  to,  but 
whether  the  card  or  the  loose  leaf  will 
invite  this  is  yet  to  be  seen.  Some  men, 
perhaps  most  men,  when  they  do  pilfer, 
take  the  assets  of  the  bank,  the  cash, 
securities,  etc.,  but  occasionally  one 


Will  a man  who  wfould  go  wrong 
stop  at  a piece  of  linen  thread,  bolding 
a leaf?  Will  he  stop  at  a rod,  or  a 
lock?  Bound  books  have  not  prevented 
fraud;  will  the  other  systems  invite  it? 
Will  he  not  find  a wTay — or  make  one, 
as  history  has  proven  time  and  again? 
After  all,  does  not  the  whole  matter 
simmer  down  to  human  honesty?  You 
may  lock  the  books  or  the  drawers,  so 
that  two  men  and  two  keys  are  neces- 
sary to  open,  but  will  he  not  defeat 
this,  if  lie  is  a clever  rogue? 

As  to  the  possibility  of  loss  or  mis- 
placement, let  this  be  said  for  the  loose 
leaf  ledger:  it  can  only  go  astray  by 


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THE  BANKERS  MAGAZINE. 


design — by  intent;  the  card  may,  and 
often  does  become  misplaced  in  error. 
The  loose  leaf  is  fast  until  its  life  is 
ended,  when  it  comes  out  to  stay,  but 
the  card  is  loose  all  the  time — else  it 
would  not  be  a card.  The  one  is  a 
book — really  a book,  as  the  cuts  will 
show,  with  real  binding  and  back  and 
sides;  the  other  is  a bit  of  bristol  board 
sliding  on  a rod. 

As  to  bulk,  many  banks  raise  the 
point  of  desk  room,  and  those  whoso 


hand  would  show.  Matching  each  other 
in  this,  it  is  “take  your  choice.” 

Will  They  Stand  in  Court? 

In  so  far  as  the  legality  of  these 
methods  goes,  let  this  be  said:  It  is 

a bigger  subject  than  space  permits  to 
handle  with  justice,  but  they  will  stand 
in  court.  It  is  a principle